Prepare for Tax Season 2025: A Comprehensive Guide
- Karen Scheepers
- 8 hours ago
- 5 min read
Beginning in July 2025, South African taxpayers face the annual task of filing income tax returns for the 2024/2025 financial year (covering income from 1 March 2024 to 28 February 2025). Both individual earners and business owners in Potchefstroom will need to navigate this period carefully.
This article provides an overview of key information for personal income tax, explains how the business tax year works and its impact on business owners’ personal tax, outlines important filing deadlines, offers practical tips for filing, and warns of penalties for non-compliance. By staying informed and prepared, taxpayers can approach the 2025 tax season with confidence and avoid unnecessary stress.
Personal Income Tax Basics for 2025
Understanding the Tax Year:
The personal income tax “year of assessment” in South Africa runs from 1 March to the end of February. The return due in the 2025 filing season therefore covers all income earned and deductible expenses incurred between 1 March 2024 and 28 February 2025. Salaries, freelance earnings, rental income, investment interest, and other worldwide income of South African residents during this period must be considered in the tax return.
Who Needs to File:
Not every individual is required to submit an income tax return, but most do. SARS (South African Revenue Service) will automatically assess many taxpayers with straightforward affairs by using employer and third-party data, these auto-assessment notices are issued via SMS/email between 7 and 20 July 2025 taxtim.com. Taxpayers with simple, single-source incomes (for example, one salaried job and no additional income) might find that SARS has done the work for them.
If the auto-assessment is correct and one is satisfied with it, no return filing is needed, any refund will be paid out automatically sars.gov.za. However, those who are not auto-assessed or who need to make changes (e.g. to claim deductions or declare additional income) must still complete and submit an ITR12 personal tax return. Generally, if you conducted any trade (business activity) or earned any income beyond basic employment (such as multiple employers, investment income above certain thresholds, or rental income), you are required to file a return.
South Africa’s tax thresholds mean that income below a certain level (approximately R95,750 for individuals under 65 in the 2025 tax year) would not attract income taxsars.gov.za, but if you meet other criteria or want to claim a refund for tax withheld, filing a return is advisable.
Personal Income Tax for Business Owners:
Business owners have some additional considerations even when it comes to “personal” tax. A small-business owner operating as a sole proprietor or partner in a partnership doesn’t pay separate corporate tax, instead, all the business’s profits for the tax year are treated as part of the owner’s personal taxable income quickbooks.intuit.com. Such individuals are often classified as provisional taxpayers because tax on their business income isn’t fully collected through PAYE (Pay As You Earn) during the year.
On the other hand, those who own companies (PTYs) or close corporations will file a separate company tax return for the business. Still, any salary, bonus or other remuneration the owner drew from the company during March 2024–Feb 2025 must be reported in their personal return quickbooks.intuit.com.
Dividends taken from a company are subject to a different dividends tax and typically do not form part of personal taxable income, but any director’s fees, interest or rental paid by the company to the owner would be included in personal income. In short, being a business owner means one’s personal tax return can be more complex, it must account for all income streams, including the profits or earnings derived from one’s business activities.
South African Business Tax Year and Personal Tax Implications
Business Financial Year vs Personal Tax Year:
Unlike the fixed personal tax year (March through February), businesses in South Africa (especially companies) may have flexibility in choosing their financial year-end. Many companies align with the fiscal year ending 28 February, but others might end their year on 30 June, 31 December or any other month. It’s important to note that regardless of a company’s financial year, personal income tax remains assessed on the March–February cycle.
This means a business owner could be dealing with a company tax return for a different period than their personal tax return. For example, a company might have a year-end in December, but the owner’s personal tax return will still encompass March–Feb. Business owners need to ensure that any income taken from the business during the personal tax year (March–Feb) is included in that year’s personal return, even if the business’s own financial statements cover a different period.
Provisional Tax Duties:
Many business owners fall under the provisional tax system, which requires periodic advance tax payments. In fact, SARS notes that provisional taxpayers are “mostly business owners”. Provisional tax isn’t a separate tax type, but a method of paying income tax in advance to spread the burden. Two provisional payments are generally due: one midway through the year (typically end of August) and one at the end of the tax year (end of February), with an optional third “top-up” payment thereafter if needed.
These payments are based on estimated taxable income. While the provisional tax payments themselves are not the final assessment, they have a direct relationship to personal tax: they reduce the final amount owed on the annual return. A diligent business owner will track profits through the year to avoid underestimating income. Failing to submit provisional returns or to pay on time can lead to penalties, SARS imposes a 10% late payment penalty on missed provisional payments, plus interest at around 10% per annum on the overdue amount taxtim.com.
Additionally, if a business owner underestimates income to too great a degree, SARS can levy an underestimation penalty (also usually 20% of the shortfall) when the final return is assessed. The key implication is that business owners must be proactive throughout the year: the personal tax filing in July–January is just the final step, and it should align with provisional payments and the business’s own records.
Turnover Tax for Micro Businesses:
It is worth noting that South Africa offers a simplified tax system called turnover tax for very small businesses (with turnover under R1 million). This is a separate elective system and, if opted into, it replaces normal income tax with a lower-rate tax on gross revenue. Business owners under turnover tax still need to file an annual turnover tax return and may have different deadlines, but in general this regime simplifies the tax calculation. If a Potchefstroom entrepreneur qualifies and has opted for turnover tax, they should ensure they meet those specific requirements; otherwise, the standard personal and provisional tax rules apply.
In the next article we will have a look at the following topics:
Important Filing Deadlines in 2025
Practical Tips for a Smooth Filing Experience
Penalties for Non-Compliance
The South African tax season starting in July 2025 doesn’t have to be a daunting ordeal. With proper preparation, understanding what income to declare, keeping track of business and personal finances, noting key deadlines, and following best practices for filing, individuals and business owners in Potchefstroom can manage their tax responsibilities smoothly.
Staying compliant not only avoids penalties, but also gives peace of mind that one’s financial affairs are in good order. For those who feel unsure or overwhelmed by the process, help is readily available. Wave Breaking Accounts, can provide professional assistance and guidance with tax matters, ensuring that Potchefstroom taxpayers get through the 2025 tax season with confidence and compliance.
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