Claiming for the section 12H learnership allowance
10 November 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: I am running
an accounting and tax practice and I employ youth fresh from universities and
colleges. Once they get experience they are taken by other employers who are
looking for experienced staff. I understand that my company can claim up to R30
000 per year as long as the person being trained is 35 years and below and the
company should be registered for PAYE and may be a certain seta. Where do I
register for the company to be eligible to claim? How do register for my
company to be recognised as a trainer for the youth subsidy? Please assist me
with the registration process.
A: We are not
quite sure what you mean when you refer to "a trainer” and the "youth
subsidy”. From the reference to the R30
000 per year we assumed that you are not referring to the employment tax
incentive, but rather to the section 12H (of the Income Tax Act) additional
deduction in respect of learnership agreements.
Section 12H does not require that the employer be registered
(as a trainer or otherwise). The
requirement is that the ‘learner’ must be a party to a registered learnership
agreement with an employer and that agreement was entered into pursuant to a
trade carried on by that employer.
A ‘learner’ means a learner as defined in section 1 of the
Skills Development Act, 1998 and a ‘registered learnership agreement’ means a
learnership agreement that is—
(a) registered in accordance with the Skills Development
Act, 1998; and
(b) entered into between a learner and an employer before 1
You must complete the IT180 (Declaration by employer for the
purpose of claiming a deduction for an allowance in respect of a learnership
agreement or contract of apprenticeship).
The service offered by SAIT is limited to guidance and we can’t assist
you with the registration process.
Interpretation note 20 deals with the learnership allowance in detail
and should be referred to for more detail.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.