Question $4(20$ Marks$)$

Teddy Buthelezi, a budding young entrepreneur from Gqeberha started a new business on $1$ March $2022.$

His turnover $($cash receipts$)$ for the year of assessment ended $28$ February $2023$ amounted to R$720000.$

His business qualifies as a microbusiness and is registered as such.

As at $28$ February $2023,$ a debtor still owes him an amount of R$18000.$ On $1$ April $2022,$ he converted his

garage into a business premises at a cost of R$55000.$ The garage made up $15\%$ of the total area of his

primary residence. The primary residence was purchased in $2018$ for R$850000.$ After six months in

business, the business was flourishing and Teddy needed a bigger place and thus decided to sell the

property on $30$ September $2022$ for R$1300000.$ The portion of the proceeds $($from the sale of the house$)$

that relate to the converted garage amounted to R$220000.$

Teddy also replaced an old oven with a new state$-$of$-$the art industrial oven machine. He sold the old oven

for R$9000$ and made a capital gain of R$2500$ on the sale.

Required:

$4\mathrm{.}1$ Determine Teddy$$s turnover tax for the $2023$ year of assessment.

show all workings$/$calculations

$(14$ marks$)$

$4\mathrm{.}2$ Should Teddy decide to deregister voluntarily as a micro business, explain the

process in terms of paragraphs $9$ and $10$ of the Sixth Schedule

$(3$ marks$)$

$4\mathrm{.}3$ Should Teddy$$s business exceed a turnover of R$1$ million by the end of December $2022,$ briefly

discuss the process of compulsory deregistration.

$(3$ marks$)$

Appendix

Turnover tax table: $2023(1$ March $202228$ February $2023)$

Taxable turnover $($R$)$ Rate of tax $($R$)$

$13350000\%$ of taxable turnover

$3350015000001\%$ of taxable turnover above $335000$

$5000017500001650+2\%$ of taxable turnover above $500000$

$750001$ and above $6650+3\%$ of taxable turnover above $750000$