MEASURES TO BUSINESSES - COVID-19

The other countries our group has offices and/or work in regularly, are in the following lockdown situations:

South Africa until 16 April 2020

Cyprus until 13 April 2020

Mauritius until 3 April 2020

Namibia until 17 April 2020

Uganda until 15 April 2020

Mozambique in partial lockdown

ADVICE ON INTERNATIONAL ENTITIES

All these measures may have an effect on international entities, like companies and trusts. Please see   ADVISORY #4 – Advice on International Entities more information in this regard.

The following information is provided to assist our clients when faced with difficult decisions regarding international taxation.

International taxation and COVID-19:

The Organisation for Economic Cooperation and Development (OECD) is an international organisation which aims to build better policies for better lives; these policies include tax policies. The OECD has recently announced tax policy guidelines to the various revenue bodies in the world in relation to the COVID-19 pandemic which include, among others, the following aspects: (1) the extension of deadlines for the submission of tax returns and tax payments; (2) the deferral of tax payments to assist cash flow; (3) the remittance of penalties of tax returns and interest for late filing or tax payments; (4) the suspension of debt recovery;

The South African Revenue Service (SARS) has indicated that it will continue to assist taxpayers via online services. The taxpayers are, however, urged to still adhere to deadlines and fulfil their tax obligations and therefore have not followed the OECD’s guidelines. SARS has also not provided directives in relation to broader international taxation matters on which COVID-19 will have an impact.

The focus of this advisory is on three of these aspects:

Individuals:

An individual is a South African tax resident through one of the following two tests: (1) the physical presence test; (2) the ordinary resident test.

The physical presence test is based on the number of days a person spends in an income tax year in South Africa. The ordinary resident test is a common law test as it relies on the interpretation of case law. In order to ensure that the correct professional advice is given to a client with reference to these tests, a case-by-case analysis must be performed. For more information please contact us.

The measures that are applied to assist with COVID-19 (which includes medical advice, lockdown, forced quarantine, the closure of borders) may have the consequence that individuals are present in South Africa for longer than it was originally planned. It has been noted that some of the other tax jurisdictions have suspended the counting of days for purposes of tax residence purposes.

SARS has not to date issued any directives in this regard.

Board meetings:

Due to COVID-19 various travel restrictions are in place. This has an impact on meetings, especially where some of the members of management are based abroad. Section 73 of the Companies Act, 71 of 2008 makes provision that meetings can be held either physically or electronically.

It is important that a South African location must be used for some of the directors in order to ensure that the effective place of management remains in South Africa. This obviously also applies where the company is resident in another country, to the point that the meetings have to be held outside South Africa, with reference to SA residents. A Mauritius company’s meetings, for instance, should be held in Mauritius or at least hosted there and the majority of attendees should be outside their country of residence, where applicable.

Due to the uncertainty in relation to COVID-19, juristic entities are urged to explore alternative means of holding meetings whilst ensuring that the entities remain South African tax residents.

Some of the other global jurisdictions have indicated that changes in the operating practices of juristic entities due to COVID-19 will not have an impact on the tax residency of the juristic entities provided that these changes are temporary and in reaction to the COVID-19 pandemic.

Enhanced Substance Requirements

Since 2018, some companies in many countries must satisfy enhanced substance requirements relating to the core-income generating activities, employment and expenditure. The substance requirements are not prescriptive, and generally companies intend to satisfy them in a number of ways, some of which could involve travel from overseas.

These arrangements may now be in limbo following the restrictions due to COVID-19.

As we approach Easter, have you ever wondered why the day of Jesus’s crucifixion is called “Good Friday?” How can the brutal death of a good and blameless man be referred to as good? He healed the sick, fed thousands, gave free advice on how to prosper in life and set many free of oppression.

Paradoxically, the day that seemed to be the greatest triumph of evil was actually the exact opposite. This was the good plan to redeem the world and introduce a new way of living. Life came from death, an act that separated the old from the new.

At DLR we realize that some of our clients are facing very difficult or uncertain times. For some it even feels like death, with little control over how this will impact their employees and family.

There is HOPE and opportunity

We have weathered terrible crashes and depressions before and we’ve always picked ourselves up and remade our economy and society, setting the stage for a more prosperous future.

Periods of great pain and devastation always leaves a void for great ingenuity and inventiveness. We can cross our fingers and hope for the best, or we can take steps towards a better, more prosperous future. The clock is ticking and those who believe life can come from this death, will act swiftly. They will take the opportunity to rethink their business models and fill the void left by the COVID19 storm.

We want YOU to be one of those who see opportunity where others see chaos.

The key to success in these turbulent financial times lies in the ability to make quick adjustments on a regular basis with a keen eye on the future. This happens in a close relational partnership between our advisors and clients. A holistic view towards our client’s financial success is a critical outcome of this partnership. Over the last 18 months DLR has invested heavily in enhancing our value proposition and now offer an even more expanded suite of services.

DLR is in a unique position to provide hindsight (insights based on the past which help build understanding), insight (an understanding of the nature of things as they exist today) and foresight (what will happen in the future). This sets the stage for innovation and game-changing performance for our clients.

DLR is able to advise and guide you through these turbulent times.

In conclusion we share with you the views of Alan Knott-Craig (SA author and entrepreneur) on how South Africa is already benefiting from the Covid-19 virus

• Cyril Ramaphosa can use the economic crisis as leverage to implement the much-needed structural economic reforms our country needs, without the ANC in-fighting that has previously hamstrung his efforts.

• People have opened their eyes to the power of online education. No need to print and deliver millions of textbooks. No matter where you live, you can have a world-class education.

• Less flying and driving. Turns out it isn’t so hard. Good for traffic and road safety. Good for the climate.

• Eskom’s grid can take a breather whilst essential maintenance is carried out and IPP’s prepare for selling directly to customers, reducing our reliance on Eskom, ultimately creating a stronger and more resilient power grid.

There is life after death, we are looking forward to sharing it with you. Please contact us to set up an appointment.

The measures announced by the SA government have been in existence for a few weeks. We have noticed that almost all of our clients qualify for one or more of these measures, mostly dependent on their industry. In this advisory we are reviewing some of those measures and some practical information on this. We are aware that the government may announce new relief measures tonight and/or amend these. We will communicate these as soon as it  becomes available.

Over the past 3 weeks, DLR has gained extensive experience in advising on and successfully applying for these relief measures. This advisory contains further practical information on how you or your business can further  benefit.

GENERAL:

• Restaurants, for example, may qualify for both the Tourism and SME relief measures.

• Some measures, for instance the UIF Covid19 claims are processed quite quickly, if the relevant information is submitted completely.

• Any business who are unsure about which measures to claim for or whether they qualify, should definitely contact us for assistance.

TEMPORARY EMPLOYEE RELIEF SCHEME (TERS) // “Reduced work time”:

What does the relief entail?

• The UIF Covid19 relief applies where the employer has, due to the COVID19 pandemic, closed a business or is on reduced work time or has had a reduction in productivity, but has not yet reduced salaries.

• Either TERS or relief for “reduced work time” can be claimed and employees may be paid before the business receives the UIF claimed.

• The relief granted varies between 68% and 32% of the gross salary of the employee, depending on salary and short time not paid. The UIF grants are not taxable and therefore offer additional relief.

• The claims are paid to the employer who must then pay it over the employees, if they have not been paid already by the employer.

• Where the business claims on the “old” UIF system those claims are going to take a long time to finalise and our experience is that the claims under the Covid19 relief measures are processed quite quickly.

• In order to ensure that the correct procedure is followed and the relevant documentation is submitted, a case-by-case analysis must be performed.

Who can I contact for assistance? Please contact Riana le Roux at riana.leroux@dlradvice.com

RELIEF FUNDS

Tourism Relief Funding for SMME’s

What does this relief entail?

The Department of Tourism reserved R200 million for SMME’s in the tourism and hospitality industry who are under stress due to the travel restrictions.

• Applicants in the Tourism industry with turnover of less than R 5 million qualify as EME and can therefore claim this grant.

• The applicant entity must either be BEE-compliant or be an Exempted Micro Enterprise (“EME”).

• The once-off grant is limited to R50,000 per applicant.

• The grant is based on the monthly business costs of the applicant. The Department of Tourism calculates the final amount granted.

Who can I contact for assistance? Please contact Ig van der Merwe at ig.vandermerwe@dlradvice.com

Relief to SMEs

What does this relief entail?

• The relief is limited to SA companies and the company must have 70% SA employees.

• Priority will be given to the businesses of women and people with disabilities.

• The relief is structured according to the circumstances of the applicant and could consist of a loan and/or a grant.

• The grant is based on the applicant’s monthly business costs and, if applicable, raw material purchases.

• The Department calculates the final amount granted.

Who can I contact for assistance? Please contact Ig van der Merwe at ig.vandermerwe@dlradvice.com

Youth Business Relief Fund

What does this relief entail?

The relief assists youth businesses with reference to operational costs, labour costs and rental.

• The applicant must be a South African citizen, between the age of 18 to 35 years.

• The applicant must have an existing business.

• The application will be structured according to the specific situation, probably part loan and part grant.

• The grant/loan is based on the applicant’s monthly business costs and, if applicable, raw material purchases.

Who can I contact for assistance? Please contact Hanno Lourens at hanno.lourens@dlradvice.com

BANKING INDUSTRY

What does this relief entail?

The commercial banks have published their measures to assist businesses and individuals. We have been in contact with most of the major banks and do have details of how to apply for this or of how this affects you.

• In most cases a 3-month payment holiday can be claimed on monthly repayments on bonds, hire purchases and similar debt

• The various banks handle these holidays differently and may present different options. It is important to request advice on which options would be better and cheaper in the long run.

Who can I contact for assistance? Please contact Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com or Ig van der Merwe at  ig.vandermerwe@dlradvice.com

DLR is experienced in dealing with these measures on behalf of our clients, please do not hesitate to contact us.

During this uncertain time of being in the current COVID-19 lockdown and what the future holds for you, your family and your business, it is critical to revisit your cashflow situation and improve the management of your cash reserves during as well as after lockdown.

In the current situation you are probably in the ideal position to work on improving your cash flow and we are available to advise you to work on your business for maximum endurance and to improve your resilience afterwards.

The following are some suggestions to assist you in managing your cashflow:

Debtors and Income Management

• Prioritise orders and sales nearing conclusion or completion

• Work with your debtors to ensure timely invoice payments

• Potentially reduce customer payment terms where possible and offer settlement discounts for early payment to your clients

• Consider advertising or offering special prices on existing stock

• Revisit business marketing strategies and consider improving online marketing (e.g. social media)

Creditor and Cost of Sales Management

• Start drawing (utilising) existing inventory rather than purchasing new stock

• Request extension of creditor payment terms (90-days vs. 30-days)

Expenditure and Employment Costs

• Minimise unnecessary expenditure (e.g. review your data costs, and see if there are better options) or consider incentivising staff for identifying cashflow savings

• Request rental payment moratorium from landlord (particularly if you have restricted access to your working facilities)

• Engage staff on impact of the lockdown on the business and it’s affordability of staff costs

• Delay salary increases and bonus payouts to keep cash in the business to secure business sustainability first. (Make sure your people understand this – it’s a hard time for them, too)

• Consider reducing the working hours of staff to reflect weaker demand

• Consider placing staff on unpaid leave for duration of the extended lockdown and seeking relief from the UIF Department of Labour – Temporary Employer/ Employee Relief Scheme

• Postpone all capital expenditure until you have clearer visibility on turnover

Additional Facilities, Payment Holidays and Government Funding

• Request payment holidays on debt repayments

• There are various relief measures offered by insurance companies and medical funds, which you can contact us about

• Check in with your business banker to see what additional facilities you qualify for

• Research and apply for all government or other funding support options

DLR is in a position to advise on and assist with your cashflow planning and projections and advise you to better manage your cash flow. Please do not hesitate to contact us.

The nationwide lockdown has had an impact on the economy. We also noticed that lockdown had an impact on most of our clients who are parties to lease agreements. The purpose of this advisory is to assist our clients who are unsure how to balance their cash flow with their responsibility to comply with the terms of their lease agreements. This is not an easy task.

General:

• In a lease, the one person (the tenant) pays another person (the landlord) for the use of the landlord’s property.

• The lease agreement between the tenant and the landlord determines how they must comply with it.

• It is important that the tenant and landlord communicate with each other during the lease. The Covid19 pandemic and the nationwide lockdown confirms this.

Can I evict my tenant during the national lockdown because the monthly lease has not been paid?

No, the Minister of Justice and Constitutional Development has issued a notice prohibiting landlords from evicting their tenants during the national lockdown because the tenants are unable to pay the monthly lease.

What should I do if I have to pay the monthly lease but do not earn enough income to pay the total amount?

What does the lease agreement provide?

• It is important to read the lease agreement to determine if the agreement includes a clause about events that free the landlord and the tenant from their obligations in terms of the lease.

• The possible effect of the clause is that the landlord is not required to give access to the property and the tenant is not required to pay the rental. The clause must be interpreted to determine its effect.

• The events that free the parties from the agreement include, among others, floods, fire and explosions.

If the lease agreement does not include a clause or if there is not a written agreement the common law must be considered.

What does the common law provide?

• The events that make it difficult for the persons to comply with the lease are similar to the events above.

• The events do not include financial burden.

• When there is a direct link between the Covid19 pandemic and the inability to pay the monthly lease, the tenant will be able to lodge a claim in terms of the common law.

• The common law can only be used when it is impossible to use the lease property.

What else can I do?

• It is important that landlords and tenants communicate with one another to agree about relief during the lockdown period.

• The relief can include various interim measures which include negotiated reduced lease payments between the landlord and the tenant.

• Reduced lease payments will most probably require amendments to existing lease agreements, but more importantly, it requires professional advice. We encourage our clients to contact us for more assistance.

• Any negotiations between landlords and tenants must be in writing and must specifically and clearly include sufficient details.

• We will advise you (the tenant or the landlord) and can administer future communication on your behalf to lessen your administrative burden.

• If applicable, it could also be possible for the landlord to use the rental deposit during the lockdown period to cover the basic monthly charges, which include municipal services.

• Any negotiations between the landlord and the tenant about the use of the rental deposit must be in writing and requires professional advice. We will advise you about the possibility to use this option because it involves various aspects.

• Where commercial leases are concerned, it is important to take into account that a Covid19 Tenant Assistance Relief Package (“TARP”) was announced. For more assistance please contact us.

• In order to ensure that the interests of the landlords and tenants are taken into account, a case-by-case analysis must be performed. We therefore encourage our clients to contact us for assistance to ensure that informed decisions are made.

Who can I contact for assistance? Please contact Tarita Mostert at tarita.mostert@dlradvice.com and/or your relationship manager.

DLR is experienced in dealing with these measures on behalf of our clients, please do not hesitate to contact us.

We live in unprecedented times where the world we used to know is being redefined on a daily basis. In this week’s advisory Cobus Coetzee, Insurance and Wealth expert at DLR, offers valuable advice to guide our clients in these unprecedented times. Remember, you do not have to become hopeless, there are always options.

Life & Risk Insurance

The basic need for Life and Risk insurance today is to provide security, to protect and to give peace of mind to our Families and Businesses. Due to the COVID 19 Epidemic, our health is under continuous threat; forcing us to consider the relevance of life insurance now even more than ever.

• It is important to know that Life Insurance Companies are open for business and are currently taking applications from us.This is the ideal time to review current life insurance portfolios; to align; to restructure or to apply for new cover, and making use of relaxed rules and regulations currently on offer.

• Selected and approved clients could receive life cover, without a medical examination.

We foresee that life cover could undergo change and become more expensive as the year progresses; hence our invitation to clients to call us to assist them during these uncertain times.

Short Term Insurance

• Premium saving can be realised, for example, by simply changing the cover on a vehicle not being used during lockdown from comprehensive to third party fire and theft.

• Special COVID 19 offers are available to reduce premiums

• Savings accounts could be utilised to subsidise premiums

• Business insurance: Value of shareholding should be aligned with life cover, as this restructuring could save you money.

The current epidemic can result in a rise in premiums. Looting can become a problem, speak to your Financial Advisor regarding your cover.

Investments and annuities

• It is important to stay calm and to stick with investment goals rather than making emotional decisions.

• Extreme market volatility has presented many opportunities, but the key is to stay focused on the long term and disciplined about where we spend our time

• The time of maximum pessimism is normally the best time to buy, and the time of maximum optimism is the best time to sell

• National Treasury has announced proposed temporary changes to living annuity benefits in acknowledgement of the current difficult circumstances annuitants may be experiencing.

• Options to lower your contributions exists

• Options to put contributions on hold are also available

Setup of a pre Tax Risk Fund

• We can assist to set-up a pre-Tax Risk fund for Catastrophic events. Managing your risk is important for financial success.

• All contributions are tax deductible

• Flexible options available

• Loan option available

There has never been a better time to make adjustments, especially to the way we think about our finances. We live in unprecedented times where the world as we knew it is in constant change and unpredictable, it is not business as usual. It requires an adjustment to our thinking, especially about our financial future. The key to success in these turbulent financial times lies in the ability to make quick adjustments on a regular basis guided by a team of experts that has a holistic view of our clients life goals . At DLR we refer to this as our clients “Dividend on Life”.

Holistic financial planning is the process of pursuing your life goals through the proper management of all your resources. Life goals can include buying a home, saving for your child’s education, planning for retirement, expanding your business, or leaving a legacy.

The process involves setting life goals, gathering relevant financial information, examining your current resources, and developing a blueprint for you to work toward your goals given your current situation and future plans. In short, we at DLR will assist you in improving your “Dividend on Life”.

A holistic approach to your finances is the new normal

Using a Team-Based Model, we work closely with clients to identify planning needs and opportunities, we then work in conjunction with our in-house professionals that specialize in a wide range of services to create a cohesive team intended to help you reach your own unique goals. Rather than clients receiving disjointed advice from multiple independent advisors, we bring all the necessary professionals together to work as one TEAM for you.

The Benefits of having a Holistic Financial Blueprint

A holistic financial blueprint provides direction and meaning to your life.  It allows you to understand how any financial decision you make affects other areas of your life. By viewing each financial decision as part of a whole, you can consider its short and long-term effects on your life goals. You can also adapt more easily to life changes and feel more secure that your goals are on track.

Further benefits include:

Proactivity. We work with you to anticipate your life transitions and to be financially prepared for them, by regularly assessing any potential life transitions that might be coming, and creating the action plan necessary to address and manage them ahead of time.

Insight. We will explore what specific knowledge will be needed to succeed in your situation, by first thoroughly understanding your situation, then providing the necessary resources to facilitate your decisions, and explaining the options and risks associated with each choice.

Organisation. We will help bring order to your financial life, by assisting you in getting your financial house in order (at both the “macro” level of investments, insurance, estate, taxes, etc., and also the “micro” level of household cash flow).

Accountability. We will help you follow through on financial commitments, by working with you to prioritize your goals, show you the steps you need to take, and regularly review your progress towards achieving them.

Objectivity. We bring insight from the outside to help you avoid emotionally driven decisions in important money matters, by being available to consult with you at key moments of decision-making, doing the research necessary to ensure you have all the information, and managing and disclosing any of our own potential conflicts of interest.

Partnership. We attempt to help you achieve the best life possible but will work in concert with you, not just for you, to make this possible, by taking the time to clearly understand your background, philosophy, needs and objectives, work collaboratively with you and on your behalf (with your permission), and offer transparency around our own costs and compensation

A Team. Rather than clients receiving disjointed advice from multiple independent advisors, we bring all the necessary professionals together to work as one TEAM for you

One contact person. You work with one person that serves as connection point for ALL your financial needs

Broadens your choice of product and services

Custom designed fee structure

Long-term trust relationships

Understanding You and your business

Through an initial meeting, which is held without charge and without obligation on either party to proceed, we take the time to understand what is important to each client and identify exactly what they would like their future to look like. Through discussing your motivations, fears and objectives, our advisers can help define your goals for the future.

We have carefully selected you as someone that could benefit from our holistic financial model as it would give you the peace of mind that every aspect of your finances is aligned with your objectives and values.

You can expect a call from one of our experts soon. Being an independent group, we remain impartial on which solutions we recommend to our clients.

It is possible to actively invest money outside South Africa. There are various options available. This advisory will focus on one aspect of investing outside South Africa specifically regarding foreign trusts and companies. For more details or for more options about investing please contact us.

What are the advantages of offshore trusts?

• Diversification of financial risks between countries, against foreign exchange changes and different types of investments,

• Protection of assets in strong, well managed legal structures,

• Most tax effective structuring and minimisation of taxes, while complying with international laws,

• Most efficient international estate planning; maximising your legacy for your family,

• Using international life policies to increase international estates, without attracting more death taxes.

Why should I choose DLR Family and Business Advisory as a co-driver of my company and trust?

• Our approach can be compared to that of a co-driver in a vehicle.

• We understand that this is a process that takes time and requires us to invest in our clients,

• We are actively co-steering the registered companies and trusts of our clients to make sure that our clients achieve their “current and future” goals,

• This means that our involvement is continuous and not only once a year,

• Our South African offices are the link between you and our international offices,

• Some of our South African directors are co-directors of our international offices,

• This means that your company and trust is represented by people you know, have confidence in and trust.

• This personal involvement represents our unique approach to our clients,

• We are registered members of BOKS International Limited which is a top 25 global alliance of expert professional firms. The purpose of this alliance is to provide high quality professional services and advice to clients globally. Our company is the link between you, our client, and the world.

• We have the necessary qualifications, expertise and experience to assist and advise you on the aspects involved in the administration of your company and trust.

• We have set up companies and trusts in a variety of countries for years. This means that we will ensure that the registration and administration of the companies and trusts comply with the legislation in these countries and are run smoothly.

Which types of options do I have?

1.  Botswana Trust as shareholder of

• Mauritius Global Business Company or Seychelles International Business Company

2.  Cyprus Trust as shareholder of

• Cyprus company or Seychelles International Business Company or Mauritius Global Business Company

Please note that a trust can also be used separate from a company for investment purposes, depending on the situation. These are just examples, obviously there are a variety of other options available through us, we do this work in jurisdictions all over the world currently.

Our offices in Botswana and Cyprus deal with the registration of these offshore Trusts and Companies. Our assistance continues beyond registration as our businesses are also the accountants and responsible as trustees and directors. This includes the required annual meetings and related activities.

Why should I choose Botswana, Seychelles, Mauritius and Cyprus?

Administration:

• Botswana is less than 400km from Gauteng and Mauritius, about 4 hours flying time. This ensures very easy access from South Africa.

• The administration at our offices also includes the registration of bank accounts in these countries.

• Botswana and Cyprus were English colonies and they use English law and the others include aspects of the English law into their legal system. South Africa also uses components of the English law system, especially wrt trusts and companies.

Tax:

• The manner in which the trust and company is set-up ensures tax-effectiveness and minimisation thereof, within the legal framework.

• It is important that you contact us to provide the necessary professional assistance and advice.

• Tax is affected by various aspects and we need to analyse your situation individually to ensure you can make an informed decision. This advice forms an essential component of co-steering your trust and company.

What about the costs to register a company and trust outside South Africa?

Offshore entities are more expensive than South African entities, mainly due to the Rand’s weakness, but our unique approach to this ensures that our fees are reasonable and cost-effective, especially in relation to other offshore service providers.

For more information and professional advice in this regard please contact Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com.

DLR is experienced in dealing with these measures on behalf of our clients, please do not hesitate to contact us.

How you can save time on administration and spend more time on building your business.

As a business owner your time can easily be taken up by day to day administration which causes you to have less time to focus on building your business. Directly related to this it has become crucial for you to have your business’ financial reporting readily available to make better informed business decisions.

Cloud accounting is a widely discussed topic and many businesses have moved to cloud based software. This software brings many benefits, like real time reporting showing how your business is performing and automated business tasks which limits your time spent on administration. You can also use customised reporting to extract information from the accounting software to suit your needs and assist with better management of your business.

One of the biggest advantages is being able to log onto your accounting software from wherever you are with smartphone applications. This allows you to send quotes and invoices to your customers on the go and in return you can convert your invoicing into cash flow for your business much faster. You also have the option of creating recurring invoices to be sent to clients automatically on a monthly basis. If you need assistance to better manage your customer accounts, cloud based accounting offers easy to use statement runs, automated payment reminders and keeps track of every customer’s account history, for example when invoices and statements were sent and if the client opened your invoices. It also keeps track of how many days after receiving your invoice the account is paid. This helps with better control of your agreements and forecasts for cash flow management.

Bank feeds can securely be linked to your accounting software, making it easy to capture your money received or spent with daily allocations and reconciliations.

If you have grown tired of keeping track of all your invoices for expenses and waiting for a solution, then cloud based accounting is for you. With the added value of integrated software you can immediately after making a purchase, take photos of your invoices and they can from there be captured into your accounting software. Invoices emailed from suppliers can be emailed directly into the cloud based accounting and allocated. No more capturing invoices by hand or misplacing invoices.

The advantages of cloud accounting mentioned above is only a few of the many features of the software. Our team members at DLR have the knowledge and experience to advise you on the best accounting software for your business and are equipped to assist with the installation. We also offer the necessary training to enable you to use the software to its full potential.

Should you wish to discuss this in more detail, please do not hesitate to contact Armand le Grange armand.legrange@dlradvice.com or Isaiah de Jager isaiah.dejager@dlradvice.com

A Trust is Still the ideal tool to maximise your family’s Dividend on Life.

A trust has many short- and long-term benefits for families over generations. This advisory focuses on trusts and the important benefits that they hold for you, our client.

What are the benefits of a trust?

• It is by far the best way to execute your legacy plan and provide for your family and descendants.

• It provides asset protection and limits liability in relation to business risk.

• Trusts separate the control of an asset from the owner of the asset and therefore are very efficient when planning your estate and minimising costs and duties at death.

• Trusts are very flexible for tax purposes when they are effectively managed.

• There are a variety of tax principles that can be applied to move your assets to a trust, without any tax effect.

When should I give consideration to a trust?

• You own or you are planning to invest in assets that are going to grow in value over time.

• You own one or more businesses with normal business risks attached and you need protection against creditors.

• You own or plan to buy agricultural land and it needs to be beneficially owned by more than one person or needs to be bequeathed to more than one person in your will.

• You have minor children and have to provide for them in your will.

• You have handicapped persons in your family, whether young or older, and you have to provide for them, whether in your will or while still living.

• You are considering investing offshore or doing business offshore.

• You need to prepare for the future and leave a legacy for your family and descendants.

What are the main types of trusts?

There are two main types: living (inter vivos) trusts and testamentary trusts.

• Living trusts are registered during the lifetime of someone. These trusts have a formal trust deed and apply when you register a trust while you are living.

• Testamentary trusts are registered according to the terms of a Will, which effectively forms the trust deed.

How can I ensure that my trust is managed in terms of the trust deed and legislation?

The compulsory appointment of an independent trustee in most trusts is the first step in achieving the solution. DLR as the independent trustee comprises of a group of trust experts both in the Republic of South Africa and beyond our borders. We carry out due diligence and compliance services efficiently and legally. This reduces the technical and administrative burden on our clients.

Can you also …

• Open a bank account for the trust? Yes, this forms part of our services to our clients.

• Compile financial statements? Yes, our accounting department will be able to assist you.

• File tax returns at SARS for my trust? Yes, our tax department will be able to assist you.

• Assist with other questions? Please contact us for professional advice and assistance.

For more details please contact any of the following individuals:

Pretoria: Blessing Chikwanda at blessing.chikwanda@dlradvice.com

George: Ig van der Merwe at ig.vandermerwe@dlradvice.com

Oudtshoorn: Marizanne Botes at marizanne.botes@dlradvice.com

Botswana: Isaiah de Jager at isaiah.dejager@dlradvice.com

Other countries: Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com

DLR is experienced in dealing with these measures on behalf of our clients, please do not hesitate to contact us.

Due to Covid-19, the tax return system looks a little different this year. The following information is provided to assist you, our clients, with this year’s tax obligations.

How can you be tax prepared this year?

You only have to remember our company name: “DLR”

Documentation: Have your tax certificates available. This includes IRP5s/IT3(a)s, medical certificates, IT3(b)s, IT3(c)s and other third party data.

Location: Have your login details (on eFiling), banking details and contact details available.

Reservation: Be wary of emails which request your personal information including your eFiling login details and your banking details.  Banks and SARS will not request these details via emails.

Are there any changes you need to know about?

Due to Covid-19 and the related social distancing requirements, the South African Revenue Service (SARS) has simplified the requirements for individual taxpayers to file their tax returns. As part of this simplified system, SARS will make use of the data received from third parties (which include your employer, medical schemes, financial institutions, retirement annuity fund administrators and other third party data providers) to complete your tax return. If SARS has the required information, they will provide an assessment of your tax automatically. This means you will not have to complete a tax return.

Do these changes have an impact on the manner in which you interact with DLR?

No, DLR remains your tax co-driver. We will still calculate your tax and make sure that the auto-assessment reflects your tax situation (“hindsight’). Please forward all your tax documentation to us (refer to “Documentation” above for more details). Our team members at DLR have the knowledge and experience (“insight”) to ensure that you comply with your current and future tax obligations (“foresight”).

How will SARS apply the practice of auto-assessment?

• If you are selected by SARS to be auto-assessed, SARS will send you an SMS during August 2020.

• DLR will then compare your calculated tax against the auto-assessment.

• If the auto-assessment is accurate it will be accepted; SARS will process any under- or overprovision of tax as usual.

• If the auto-assessment is not accurate DLR will edit your tax return and submit it to SARS.

When must the 2020 tax returns be filed?

Tax returns can be filed online (via eFiling or the SARS MobiApp) or by appointment at a SARS branch. DLR services extend to the filing of our clients’ tax returns to give our clients the peace of mind that they comply with their tax obligations. SARS confirmed the following new filing dates apply for the 2020 tax year:

• 1 September to 16 November 2020: These dates apply to taxpayers who file online.

• 1 September to 22 October 2020: Taxpayers who cannot file their tax returns online can make an appointment at a SARS branch during this period.

• 1 September 2020 to 29 January 2021: Provisional taxpayers who file their tax returns online only have to submit it during this period.

For more details please contact any of the following individuals:

Deon Botha at deon.botha@dlradvice.com

Tarita Mostert at tarita.mostert@dlradvice.com

Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com

DLR is experienced in dealing with these measures on behalf of our clients, please do not hesitate to contact us.

The importance of medical cover can be the difference between life and death today. Choosing between the most suitable medical cover can become a daunting task, but we can help!

This advisory will focus on the benefits of having Medical cover, how to choose between different medical schemes and how to close the gaps between the account shortfalls that your medical cover doesn’t cover in full.

Benefits of having a medical scheme:

• Medical scheme membership protects members financially if they suddenly have to pay large, unexpected medical costs

• Members have access to the best private hospitals in the country

• Medical schemes pay for many other healthcare needs such as nursing, surgery, dental work, medicine, physiotherapy and eye-care

How to choose between all the different medical schemes out there:

What is the difference between a medical aid and a hospital plan?

Medical aids cover a lot more than hospital plans do. A hospital plan covers treatment and medical costs that arise while the insured is booked into hospital, while a comprehensive medical aid will cover hospital costs and other private medical needs like specialist consultations, GP visits, and additional tests and procedures in and out of hospital.

Factors to consider when choosing a scheme that meets your needs:

• Sustainability

Long term sustainability of a medical scheme ensures that members’ claims can be paid in future and that the scheme can maintain favourable contribution increases.

• Plan Range

Members should have sufficient choice between plans that best matches their needs.

• Affordability

For many members; affordability of cover could be a key consideration.

• Value of access to treatment

Members can derive value from access either through greater choice of healthcare providers or through reduced contributions by being restricted to certain healthcare providers.

• Service

High quality service levels between medical schemes and clients can be obtained by appointing a Financial Advisor who will act on behalf of clients and who will provide advice and support with no extra charge.

• Digital Capabilities

Digitalisation in medical schemes enhances service experiences to members and improves the delivery of healthcare.

Shortfalls can be covered by adding Gap Cover which has the following benefits:

• Choose between a 200% or 500% benefit options

• Shortfalls on procedures performed by doctors and specialists

• Dental procedures and specialised radiology

• Co-payments and deductibles

• Cancer diagnosis and oncology treatment

• Internal prosthetic devices

• Trauma counselling

• Rehabilitation and preventative care

• Accidental disability and death

• Gap policy premiums and medical aid contributions

• Lifestyle benefits offering fuel rewards and international travel insurance

Further Financial Tips

When taking out medical aid for the first time or if you are thinking about switching plans, consider speaking to a financial advisor or professional independent broker. These financial specialists are able to understand your unique requirements and provide you with unbiased advice.

Our dedicated team members at DLR have the knowledge and experience to advise you and/or your business on the process of joining a new Medical Aid; or to support you with service on existing Schemes.

Should you wish to discuss this in more detail or to enquire about alternative options; please do not hesitate to contact us:

Natasha van Wyk on natasha.vanwyk@dlradvice.com or

Donald van Wyk on donald.vanwyk@dlradvice.com or

Dawie Louw on dawie.louw@dlradvice.com

COVID-19 exposed us to the reality of unforeseen risks.

We already know that these risks will only increase. To plan accordingly for future unforeseeable risks the Alternative Risk Transfer product is a game changer.

Tough times call for strict Financial Management. Creating and building a pre-tax fund , can be the difference between survival and bankruptcy. Utilizing this fund when in need, can make the difference.

What is Alternative Risk Transfer (ART)?

It allows you to purchase additional cover and transfer risk without having to use traditional insurance. Self-insurance is a form of alternative risk transfer when an entity chooses to fund some of their own losses rather than pay insurance premiums to a third party.

Why we advise our clients to seriously consider the product:

• The policy enables clients to carry a large part of their own risks. The product can be managed together with clients’ conventional insurance.

• The insurance premiums are deductible in accordance with section 11 of the Income Tax Act as the case with normal short term insurance premiums.

• Risks that are normally uninsurable or very expensive can be included under the policy. (for instance professional indemnity and cover for business interruption due to contagious diseases).

• Policy holders are rewarded for good risk management and unclaimed premiums are transferred to the following year and rewarded with a no-claim bonus.

• Conventional cover is limited to covering catastrophes which are identified by the insurance companies as acceptable risks.

• The policy encourages policy holders to apply better risk management, which will lead to savings in respect of direct insurance costs.

• Loans are available against fund value, effective rate below 3.5%.

• The fund value can be utilised as a management tool to structure your short term premiums and enable better cover and lower premiums.

A new approach

Alternative Risk Transfer (ART) is an insurance concept that has commonly been used worldwide for the past 50 years and could be described as a “must have item in the toolbox of major corporate risk managers”. The concept was first introduced in South Africa in the 1980s and has since shown dramatic growth — to the extent that today more than R4 billion in premiums per annum are written in ART products in South Africa and more than US $50 billion worldwide.

ART is a sensible alternative to conventional insurance for clients with a long-term view of risk management and who are committed to carrying part of the risk. Furthermore, clients are expected to put effective risk management measures in place in order to keep claims and losses to a minimum. The focus of the product is on risks that are uninsurable or very expensive to insure and is managed as a total insurance programme in combination with conventional insurance.

“At the end of the day, using an ART facility is a long-term commitment and is there no doubt that ART users who are used to enjoying the benefits of their own risk financing facilities will not be keen to return to the very market that forced them in ART structures in the first place.” – Cover Magazine

Our dedicated team members at DLR have the knowledge and experience to advise you and/or your business on the Alternative Risk Transfer product.

Should you wish to discuss this in more detail or to enquire about alternative options; please do not hesitate to contact us:

Cobus Coetzee: cobus.coetzee@dlradvice.com

DLR  is a family and business advisory group.

DLR supports the lockdown measures in South Africa, but we will be available throughout this period. All our team members are working from home.

Feel free to contact us via Email, Facebook or mobile number. We will continue to support and guide you in all your family and business decisions through this uncertain period.

We are all in this together, and as always our core values of PEOPLE, PASSION and PURPOSE are in the forefront of everything we do.

This uncertain time might be challenging for some businesses, which is why we are here for continuous support and advice.

 Stay safe and stay at home!

In the light of President Cyril Ramaphosa’s announcement on 23 March 2020 regarding relief measures aimed at assisting South African businesses and their employees, the following:

DLR is in a position to assist our clients to gain maximum benefit from the relief measures as stipulated in this letter, please do not hesitate to contact us.

The key measures that have an impact on businesses, their employees and poverty-stricken citizens are as follows:

• Temporary Employee Relief Scheme (“Reduced work time”): The SA Government has instituted a special dispensation for companies in distress. In terms of the Scheme, as it is currently understood, the companies will be able to make direct payments to their employees. For further assistance please contact Riana le Roux at riana.leroux@dlradvice.com

• SARS measures:

  • Wage subsidy: A subsidy of R500 will be granted for the next four months to employers in the private sector whose employees earn less than R6,500 per month under the Employment Tax Incentive. The Government provides relief to qualifying employers by means of a reduction of employees’ tax. It is our current understanding that the Government will follow the same procedures with reference to the tax subsidy. For further assistance please contact Riana le Roux at riana.leroux@dlradvice.com or Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com

  • Employment tax incentive: The South African Revenue Service (SARS) has undertaken to accelerate employment tax incentive reimbursement from twice per year to monthly. For further assistance please contact Riana le Roux at riana.leroux@dlradvice.com

  • Further tax relief: Businesses that are tax compliant which has a turnover of less than R50 million will be allowed, over the next four months, to delay 20% of their PAYE liabilities as well as a portion of their provisional corporate income tax payments. There will be no penalties or interest payable for the next six months. For further assistance please contact Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com or IG van der Merwe at ig.vandermerwe@dlradvice.com

• Relief funds:

  • Tourism Relief Funding: The Department of Tourism has made R200 million available to SMEs in the tourism and hospitality industry who are under stress on account of the travel restrictions. The SMEs must have a turnover of less than 2,5 million in order to qualify for the funding.

  • Relief to SMEs: The Industrial Development Corporation (IDC) has made R500 million available to distressed SMEs. The application process is simplified.

  • Funding products: The IDC, in conjunction with the Department of Trade and Industry and Competition has agreed to provide funding of more than R3 billion to vulnerable firms and to fast-track finacing of companies that are critical to the SA Government’s efforts to fight COVID-19 and to reduce its economic impact.

  • National Disaster Benefit Fund: The SA Government has allocated R30 billion to a special Disaster Benefit Fund. The Fund will pay benefits to the UIF for up to three months for qualified workers whose income has been affected by  pandemic, which includes COVID-19 related job losses, illness payouts, reduced time claims as well as support job retention.

  • Solidarity Response Fund: The fund is subsidized by businesses and individuals. The purpose of the Fund is to address repercussions in relation to COVID-19 and to introduce measures which will assist to reduce its spread. The information with reference to the Fund is currently limited to the manner in which donations can be made to the Fund.

     For further assistance please contact Tarita Mostert at tarita.mostert@dlradivce.com

• Compensation Fund: In the event that employees should contract COVID-19 at their workplace they will be paid through the Compensation Fund. riana.leroux@dlradvice.com

• Banking industry: The commercial banks are busy publishing their measures to assist businesses and individuals. We have been in contact with most of the major banks and do have details of how to apply for this or of how this affects you.

For further assistance please contact Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com or Ig van der Merwe at ig.vandermerwe@dlradvice.com

The following information is provided to assist our clients when faced with difficult decisions regarding insurance premiums and the options available to them. We strongly advise you to contact one of our advisors (see below for contact details) to discuss your options as each case is unique.

MEDICAL AID SCHEMES

Medical aid schemes are funded on a monthly basis, therefore this may well be the premium that you would not want to be returned. At most schemes your cover will be suspended upon the non-payment of the premium until the premium is paid in. This could put you at severe risk, especially in these times.

We have specialists that deal with the major medical aid schemes that can assist you in making the best decisions. Contact Natasha van Wyk (natasha.vanwyk@dlradvice.com) for assistance.

LIFE INSURANCE

Depending on the type of life policy you have, you may have different options if you find yourself in financial distress. Older type life policies have savings components to them, which may be utilised to fund premiums for a period. Most clients will have new generation life policies that do not have savings components. This means that the cover is funded in the same way that short term policies are done. Every premium buys one month’s cover.  Most insurers allow for one missed premium and then deduct two premiums in the following month. If you miss the second premium, then the policy will lapse.

If you wish to reinstate your cover, you may be required to undergo medical underwriting again. For a lot of clients, this can prove problematic.

In these times, however, insurers are implementing various plans to help clients keep their cover, by offering payment holidays, or reduced cover amounts at lower premiums for a period of time.

Clients that find themselves in a difficult financial situation can contact us for assistance. We have contracts with all the major life insurers so we’ve got you covered. Contact Cobus Coetzee (cobus.coetzee@dlradvice.com) for assistance. We have contracts with all the major life insurers so we’ve got you covered.

SHORT TERM INSURANCE

The Risk of clients in lockdown could have changed. Please speak to one of our advisors and declare all relevant information. Maybe your risk before the lockdown was spread over distance, after lockdown, it could be down to a single address or premises.

Speak to our advisors for options on motor vehicles. (commercial and personal ). This is not available if financed.

Some insurers do offer “payment holidays”, at this stage,  confined to the hospitality industry.

Please ensure that alarms are tested and are in working order. Note and comply with all conditions for cover. All conditions and exclusions are stipulated in the policy schedule.

Be careful to lower your insured amounts, this could lead to avery, if a claim arise.

Be mindful of Cyber Crime especially, COVID – 19 SCAMS

Contact Cobus Coetzee (cobus.coetzee@dlradvice.com)

For further assistance please contact Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com or Ig van der Merwe at ig.vandermerwe@dlradvice.com

BOTSWANA

In line with other countries in the world, President Masisi of Botswana announced on 30 March 2020 that the country will be going into lock-down for 28 days starting at midnight on 2 April 2020. The DLR Group supports all efforts by governments to flatten the curve of the spread of the novel coronavirus (COVID-19). However, we endeavour to be available for our clients and to limit any disruptions to the minimum.

Our office in Gaborone, Botswana is open and fully functional as all our employees will be working from home and available during this time. Please use the following contact persons for all queries, or assistance you may require.

Our switchboard will be available during normal business hours: +267 350 0587

Accounting & Tax

                                                                                                   Isaiah de Jager                             isaiah.dejager@dlradvice.com                            +267 72 108 778

                                                                                                   Melanie Kotze                             melanie.kotze@dlradvice.com                            +27 72 448 8043

                                                                                                   Nametso Bogame                      nametso.bogame@dlradvice.com                    +267 75 061 569

                                                                                                   Reinette Sevenster                   reinette.sevenster@dlradvice.com                 +264 81 712 4208

Fiduciary

 If you need assistance relating to trusts, estates and wills, please don’t hesitate to contact the relevant people below

                                                                                  Duaan Jacobs                                duaan.jacobs@dlradvice.com              +267 71 396 187

                                                                                  Pamela Bewlay                             pamela.bewlay@dlradvice.c.                +267 76 674 720

OTHER COUNTRIES

The other countries our group has offices and/or work in regularly, are in the following lockdown situations:

South Africa until 16 April 2020

Cyprus until 13 April 2020

Mauritius until 3 April 2020

Namibia until 17 April 2020

Uganda until 15 April 2020

Mozambique in partial lockdown

ADVICE ON INTERNATIONAL ENTITIES

All these measures may have an effect on international entities, like companies and trusts. Please see   ADVISORY #4 – Advice on International Entities more information in this regard.

The following information is provided to assist our clients when faced with difficult decisions regarding international taxation.

International taxation and COVID-19:

The Organisation for Economic Cooperation and Development (OECD) is an international organisation which aims to build better policies for better lives; these policies include tax policies. The OECD has recently announced tax policy guidelines to the various revenue bodies in the world in relation to the COVID-19 pandemic which include, among others, the following aspects: (1) the extension of deadlines for the submission of tax returns and tax payments; (2) the deferral of tax payments to assist cash flow; (3) the remittance of penalties of tax returns and interest for late filing or tax payments; (4) the suspension of debt recovery;

The South African Revenue Service (SARS) has indicated that it will continue to assist taxpayers via online services. The taxpayers are, however, urged to still adhere to deadlines and fulfil their tax obligations and therefore have not followed the OECD’s guidelines. SARS has also not provided directives in relation to broader international taxation matters on which COVID-19 will have an impact.

The focus of this advisory is on three of these aspects:

Individuals:

An individual is a South African tax resident through one of the following two tests: (1) the physical presence test; (2) the ordinary resident test.

The physical presence test is based on the number of days a person spends in an income tax year in South Africa. The ordinary resident test is a common law test as it relies on the interpretation of case law. In order to ensure that the correct professional advice is given to a client with reference to these tests, a case-by-case analysis must be performed. For more information please contact us.

The measures that are applied to assist with COVID-19 (which includes medical advice, lockdown, forced quarantine, the closure of borders) may have the consequence that individuals are present in South Africa for longer than it was originally planned. It has been noted that some of the other tax jurisdictions have suspended the counting of days for purposes of tax residence purposes.

SARS has not to date issued any directives in this regard.

Board meetings:

Due to COVID-19 various travel restrictions are in place. This has an impact on meetings, especially where some of the members of management are based abroad. Section 73 of the Companies Act, 71 of 2008 makes provision that meetings can be held either physically or electronically.

It is important that a South African location must be used for some of the directors in order to ensure that the effective place of management remains in South Africa. This obviously also applies where the company is resident in another country, to the point that the meetings have to be held outside South Africa, with reference to SA residents. A Mauritius company’s meetings, for instance, should be held in Mauritius or at least hosted there and the majority of attendees should be outside their country of residence, where applicable.

Due to the uncertainty in relation to COVID-19, juristic entities are urged to explore alternative means of holding meetings whilst ensuring that the entities remain South African tax residents.

Some of the other global jurisdictions have indicated that changes in the operating practices of juristic entities due to COVID-19 will not have an impact on the tax residency of the juristic entities provided that these changes are temporary and in reaction to the COVID-19 pandemic.

Enhanced Substance Requirements

Since 2018, some companies in many countries must satisfy enhanced substance requirements relating to the core-income generating activities, employment and expenditure. The substance requirements are not prescriptive, and generally companies intend to satisfy them in a number of ways, some of which could involve travel from overseas.

These arrangements may now be in limbo following the restrictions due to COVID-19.

As we approach Easter, have you ever wondered why the day of Jesus’s crucifixion is called “Good Friday?” How can the brutal death of a good and blameless man be referred to as good? He healed the sick, fed thousands, gave free advice on how to prosper in life and set many free of oppression.

Paradoxically, the day that seemed to be the greatest triumph of evil was actually the exact opposite. This was the good plan to redeem the world and introduce a new way of living. Life came from death, an act that separated the old from the new.

At DLR we realize that some of our clients are facing very difficult or uncertain times. For some it even feels like death, with little control over how this will impact their employees and family.

There is HOPE and opportunity

We have weathered terrible crashes and depressions before and we’ve always picked ourselves up and remade our economy and society, setting the stage for a more prosperous future.

Periods of great pain and devastation always leaves a void for great ingenuity and inventiveness. We can cross our fingers and hope for the best, or we can take steps towards a better, more prosperous future. The clock is ticking and those who believe life can come from this death, will act swiftly. They will take the opportunity to rethink their business models and fill the void left by the COVID19 storm.

We want YOU to be one of those who see opportunity where others see chaos.

The key to success in these turbulent financial times lies in the ability to make quick adjustments on a regular basis with a keen eye on the future. This happens in a close relational partnership between our advisors and clients. A holistic view towards our client’s financial success is a critical outcome of this partnership. Over the last 18 months DLR has invested heavily in enhancing our value proposition and now offer an even more expanded suite of services.

DLR is in a unique position to provide hindsight (insights based on the past which help build understanding), insight (an understanding of the nature of things as they exist today) and foresight (what will happen in the future). This sets the stage for innovation and game-changing performance for our clients.

DLR is able to advise and guide you through these turbulent times.

In conclusion we share with you the views of Alan Knott-Craig (SA author and entrepreneur) on how South Africa is already benefiting from the Covid-19 virus

• Cyril Ramaphosa can use the economic crisis as leverage to implement the much-needed structural economic reforms our country needs, without the ANC in-fighting that has previously hamstrung his efforts.

• People have opened their eyes to the power of online education. No need to print and deliver millions of textbooks. No matter where you live, you can have a world-class education.

• Less flying and driving. Turns out it isn’t so hard. Good for traffic and road safety. Good for the climate.

• Eskom’s grid can take a breather whilst essential maintenance is carried out and IPP’s prepare for selling directly to customers, reducing our reliance on Eskom, ultimately creating a stronger and more resilient power grid.

There is life after death, we are looking forward to sharing it with you. Please contact us to set up an appointment.

[/fusion_tab][fusion_tab title=”Advisory # 6 — You CAN benefit from these Covid19 measures ” icon=””]

The measures announced by the SA government have been in existence for a few weeks. We have noticed that almost all of our clients qualify for one or more of these measures, mostly dependent on their industry. In this advisory we are reviewing some of those measures and some practical information on this. We are aware that the government may announce new relief measures tonight and/or amend these. We will communicate these as soon as it  becomes available.

Over the past 3 weeks, DLR has gained extensive experience in advising on and successfully applying for these relief measures. This advisory contains further practical information on how you or your business can further  benefit.

GENERAL:

• Restaurants, for example, may qualify for both the Tourism and SME relief measures.

• Some measures, for instance the UIF Covid19 claims are processed quite quickly, if the relevant information is submitted completely.

• Any business who are unsure about which measures to claim for or whether they qualify, should definitely contact us for assistance.

TEMPORARY EMPLOYEE RELIEF SCHEME (TERS) // “Reduced work time”:

What does the relief entail?

• The UIF Covid19 relief applies where the employer has, due to the COVID19 pandemic, closed a business or is on reduced work time or has had a reduction in productivity, but has not yet reduced salaries.

• Either TERS or relief for “reduced work time” can be claimed and employees may be paid before the business receives the UIF claimed.

• The relief granted varies between 68% and 32% of the gross salary of the employee, depending on salary and short time not paid. The UIF grants are not taxable and therefore offer additional relief.

• The claims are paid to the employer who must then pay it over the employees, if they have not been paid already by the employer.

• Where the business claims on the “old” UIF system those claims are going to take a long time to finalise and our experience is that the claims under the Covid19 relief measures are processed quite quickly.

• In order to ensure that the correct procedure is followed and the relevant documentation is submitted, a case-by-case analysis must be performed.

Who can I contact for assistance? Please contact Riana le Roux at riana.leroux@dlradvice.com

RELIEF FUNDS

Tourism Relief Funding for SMME’s

What does this relief entail?

The Department of Tourism reserved R200 million for SMME’s in the tourism and hospitality industry who are under stress due to the travel restrictions.

• Applicants in the Tourism industry with turnover of less than R 5 million qualify as EME and can therefore claim this grant.

• The applicant entity must either be BEE-compliant or be an Exempted Micro Enterprise (“EME”).

• The once-off grant is limited to R50,000 per applicant.

• The grant is based on the monthly business costs of the applicant. The Department of Tourism calculates the final amount granted.

Who can I contact for assistance? Please contact Ig van der Merwe at ig.vandermerwe@dlradvice.com

Relief to SMEs

What does this relief entail?

• The relief is limited to SA companies and the company must have 70% SA employees.

• Priority will be given to the businesses of women and people with disabilities.

• The relief is structured according to the circumstances of the applicant and could consist of a loan and/or a grant.

• The grant is based on the applicant’s monthly business costs and, if applicable, raw material purchases.

• The Department calculates the final amount granted.

Who can I contact for assistance? Please contact Ig van der Merwe at ig.vandermerwe@dlradvice.com

Youth Business Relief Fund

What does this relief entail?

The relief assists youth businesses with reference to operational costs, labour costs and rental.

• The applicant must be a South African citizen, between the age of 18 to 35 years.

• The applicant must have an existing business.

• The application will be structured according to the specific situation, probably part loan and part grant.

• The grant/loan is based on the applicant’s monthly business costs and, if applicable, raw material purchases.

Who can I contact for assistance? Please contact Hanno Lourens at hanno.lourens@dlradvice.com

BANKING INDUSTRY

What does this relief entail?

The commercial banks have published their measures to assist businesses and individuals. We have been in contact with most of the major banks and do have details of how to apply for this or of how this affects you.

• In most cases a 3-month payment holiday can be claimed on monthly repayments on bonds, hire purchases and similar debt

• The various banks handle these holidays differently and may present different options. It is important to request advice on which options would be better and cheaper in the long run.

Who can I contact for assistance? Please contact Pieter Esterhuizen at pieter.esterhuizen@dlradvice.com or Ig van der Merwe at  ig.vandermerwe@dlradvice.com

DLR is experienced in dealing with these measures on behalf of our clients, please do not hesitate to contact us.