Do You Need an Accountant? | Buzz Accounting SA

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A South African business can run without an accountant if its affairs are simple and its owner files on time. A business that registers a company, takes on staff or registers for VAT has more filings, and errors in them cost penalties and overpaid tax. This guide helps you decide which applies to you.

What SARS and CIPC require

No law says every business must hire an accountant. The law requires you to meet certain obligations, and you can do the work yourself, ask someone you know or use a professional.

If you're a sole proprietor, your business income is part of your personal tax. You file an ITR12 once a year, and if you cross the provisional tax thresholds you'll also submit provisional returns at the end of August and the end of February. You can do all of this yourself on SARS eFiling.

If you run a registered company (a Pty Ltd), there are more obligations. A company must keep accounting records, file an annual company tax return (ITR14), and submit an annual return to CIPC within 30 business days of the anniversary of its incorporation. The CIPC return is separate from your tax return. It confirms that the company is still trading, and if it is not filed CIPC can deregister the company. Whether your company needs a formal audit or an independent review depends on its size and public-interest score. Ask us which applies to your company.

The law requires the work to be done correctly and on time, and you are allowed to do it yourself. To decide, compare the cost of an accountant with the value of your time and the cost of any errors.

When a bookkeeper is enough

Bookkeeping and accounting are different jobs. A bookkeeper records what happened — invoices, payments, bank transactions, VAT records, payroll runs. An accountant interprets what happened, keeps you compliant, and helps you make decisions about tax and structure. A small business can need a bookkeeper before it needs an accountant.

A bookkeeper, or accounting software plus an hour a week of your time, can be enough when:

You're a sole proprietor or a very small business with straightforward income and a handful of expenses.
Your turnover is well under R2.3 million, the limit for both turnover tax and compulsory VAT registration.
You don't have staff on a formal payroll yet.
Your tax affairs are simple: one income stream, no complicated deductions, no shareholders to pay.

At that stage, monthly accountancy fees may cost more than they save. Keep your records up to date, keep your slips and file accurately.

When an accountant's fee is covered

An accountant's fee is covered when the penalties avoided and the tax saved add up to more than the fee. That comes from four areas.

SARS penalties you avoid. SARS charges administrative penalties for late returns, interest on late payment, and understatement penalties if your numbers are wrong. If your provisional tax estimate is too low, SARS can charge a penalty on top of the tax. Miss the CIPC annual return and your company can be deregistered, which is slow and costly to reverse. An accountant files each return on time and checks the figures.

Tax you legally save. A Small Business Corporation, if you qualify, is taxed on a sliding scale that starts at 0% and rises to 27%, in place of the flat 27% company rate, and the difference can be tens of thousands of rand a year. An accountant can save tax by choosing between turnover tax, SBC and standard company tax, structuring how you pay yourself and claiming every deduction you're entitled to. (These rates and thresholds are the current SARS figures; SARS adjusts them annually, so always check the year you're filing for.)

Time back. If you spend a weekend a month on eFiling and VAT201s, that is time you could spend selling. Handing over the admin gives you that time back.

The VAT and eFiling machinery. Once you're VAT-registered you're filing VAT201 returns on a cycle, keeping valid tax invoices, and reconciling every period, and late or incorrect returns bring penalties. If you run payroll you're also filing EMP201 declarations by the 7th of each month and reconciling PAYE, UIF and SDL. These returns are due on fixed dates every month or two, and errors bring penalties.

A R1.2m Pty Ltd

Thandi runs a small design studio through a Pty Ltd, turning over R1.2 million a year with about R400,000 profit. Doing it herself, she pays the flat 27% company tax on the full profit — roughly R108,000. Her accountant confirms she qualifies as a Small Business Corporation, where the first slice of taxable income is taxed at 0% and 7% before higher rates apply, cutting her bill by tens of thousands of rand. He also finds that she missed her CIPC annual return, and files it days before deregistration would have started. The tax saved and the deregistration avoided cover the year's accountancy fee, and she has her weekends back. (SBC rates are set by SARS and adjusted annually; whether you qualify depends on your specific setup.)

Deciding whether you need one

You may not need an accountant yet if you're a sole trader with simple income, under the turnover-tax line, no staff, and you're comfortable on eFiling. You are likely to need one once any of these apply: you register a Pty Ltd, you take on staff, your turnover climbs toward the VAT or turnover-tax thresholds, or SARS sends you a letter you don't fully understand.

There is also a middle option. You can keep doing your own day-to-day bookkeeping and use an accountant for the year-end, tax planning and a check of your figures. Tell us your setup and we'll tell you whether you need an accountant and for which tasks.

Common questions

Is it a legal requirement to have an accountant in South Africa?

No. No law requires you to hire an accountant. The law requires that you keep proper records, file the right returns on time (SARS and, for companies, CIPC), and pay what you owe. You're allowed to do all of that yourself. Whether you should is a question of cost and risk. Companies above a certain size may need an independent review or audit, so check which applies to yours.

What's the difference between a bookkeeper and an accountant?

A bookkeeper records the transactions — invoices, payments, VAT records, payroll runs — and keeps your day-to-day numbers clean. An accountant interprets those numbers, keeps you compliant, files your tax returns, and advises on structure and tax. A small business can need bookkeeping before it needs accounting, and some need both.

I'm a sole proprietor. Can I do my own tax?

Yes, if your affairs are simple. If your income is straightforward, you're under the turnover-tax and VAT thresholds, and you have no payroll, doing your own ITR12 (and provisional returns if they apply) on SARS eFiling is realistic. There is more to file once you register a company, hire staff or approach VAT registration, so get help at that stage.

How do I know whether an accountant's fee is justified?

As a rule of thumb, an accountant covers the fee when the penalties they help you avoid, plus the tax they legally save you, plus the value of your time back, add up to more than their fee. For a sole trader with simple affairs, the fee may cost more than it saves. For companies, VAT-registered businesses and businesses with staff, the filings and tax choices are more complex. Get in touch and we'll tell you which applies to you.

Do you need an accountant for your South African business?