Benefits of developing skills

2016-11-23 06:00
Tracy Gowar

Tracy Gowar

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Question:

I am the owner of a construction business. Skills development is very important and I invest where possible in training my staff. I understand that if my staff take up learnerships through my company, there are certain tax benefits to help cover the costs of the learnerships. Is this correct?

Answer:

From a Black Economic Empowerment (BEE) and tax perspective, government provides incentives to businesses to invest in formal learning programmes.

Any business, when reporting under the skills development element of its BEE scorecard, can obtain valuable points for its investment in learnerships for its staff. In addition, an employer can also potentially benefit from each employee that is registered for a formal learnership under section 12H of the Income Tax Act 58 of 1962.

Section 12H currently determines that an employer can claim a learnership allowance for every employee it enrolls in an accredited learnership. For every learner enrolled, R30 000 can be deducted from the business’ taxable income per year and for every disabled learner, R50 000 can be deducted.

A further incentive exists in the form of a completion allowance that the employer can claim for each learner that successfully completes a learnership. The completion allowance is the same as the learnership allowance and is awarded upon successful completion of the learnership.

An Employment Tax Incentive offered in conjunction with government is further aimed at incentivising employers to employ young, mostly unskilled employees. This incentive is only available to employers with respect to employees who meet certain criteria.

By way of the above incentives, you will be able to invest in your employees, whilst simultaneously ensuring that a BEE and financial incentive is also received by your business for doing so.

It is important to seek the advice of a knowledgeable professional to ensure that your BEE planning is correctly conducted and an accredited skills academy is recommended which offers accredited learnership programmes to ensure that you are able to benefit from the offered incentives.

) Tracy Gowar, Associate, Phat-shoane Henney Attorneys

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