It is recommended that you consult a tax professional if you are uncertain about your tax affairs. Picture: 123RF
It is recommended that you consult a tax professional if you are uncertain about your tax affairs. Picture: 123RF

Q: I worked for an employer until August 2018 and have since been freelancing for six service providers. Since September 2018 until the end of the 2018/2019 tax year I have earned R214,500, of which R22,000 has been withheld for tax by my main service provider. After February I have only worked on contract for my main client.

  • Do I have to file two separate returns — one as an employee until end-August 2018 and another as a freelancer from September 2018 until end-February 2019?
  • Will I have to pay in any tax?
  • When and how do I register as a provisional taxpayer? — J Ferguson via e-mail.

Daniel Baines, author of How to Get a Sars Refund and tax consultant at Mazars, answers:

You will only file one tax return, on which the details of your income as employee will be reflected. You will need to ensure that you reflect all your freelancer income on the same tax return. If a client does not issue you with an IRP5, you will need to physically insert the amounts that you have received from all the service providers.

On whether you will have to pay tax, we cannot provide an answer to this based on the information given — determining such an answer involves an in-depth calculation. However, when you complete your tax return you will fill in details of all your freelancer income and expenses, and Sars will automatically calculate if any tax is owing.

We are presuming that you do qualify as an independent contractor for tax purposes and that you can deduct business-related expenses. Whether someone qualifies as an independent contractor involves an in-depth, complicated query that depends on a person’s particular circumstances. It is recommended that you approach a tax adviser to determine whether you qualify as an independent contractor.

Once you have inserted all the relevant information on the tax return, click the calculate button, which will determine whether you owe Sars any tax. This you must do before you submit your return.

There is no separate registration process for becoming a provisional taxpayer. If you are required to register as a provisional taxpayer, you must request IRP6 tax returns on e-Filing and file these at the appropriate time. 

It is recommended that you determine whether you need to file provisional tax returns. Your particular circumstances need to be carefully considered, but if your service providers are not withholding PAYE then you will probably have to register for and pay provisional tax.

* Send your questions to money@tisoblackstar.co.za