It's 20 February, and Zanele has just come up for air after the busiest summer her Cape Town café has ever had. Then her bookkeeper's message lands: taxable profit is up 40%, and her second provisional tax payment is due in eight days.

The espresso machine she meant to replace, the retirement annuity top-up she kept postponing, the catering client who never paid. Each could have trimmed her tax bill, and now there's barely time to act on any of them.

If your financial year ends on 28 February, you still have time to avoid Zanele's position. Year-end tax planning in South Africa isn't about loopholes. It's about making legitimate decisions while the timing still counts. Here are six moves to make before your year closes.

Why Year-End Tax Planning Can't Wait Until February

Most deductions and allowances depend on what happens inside your year of assessment, the 12-month period SARS taxes you on. For individuals and many companies, the current one runs from 1 March 2026 to 28 February 2027. Once that date passes, your numbers are locked in.

This year also brings changes worth planning around. The 2026 Budget widened the 0% tax band for small business corporations, lifted the retirement fund deduction cap, and more than doubled the compulsory VAT registration threshold. Planning with last year's figures could leave money on the table.

If your company has a different year-end, the same principles apply. Just count back from your own date.

Your Year-End Tax Planning Checklist

Work through these six steps, ideally starting from management accounts up to November or December:

1. Confirm your tax rate. Check that your company still qualifies for small business corporation rates.

2. Buy and use necessary assets before year-end to claim the allowances this year.

3. Write off bad debts you've genuinely failed to collect.

4. Top up your retirement annuity within the new, higher deduction limit.

5. Submit an accurate second provisional tax payment by 28 February 2027.

6. Review your VAT registration against the new R2.3 million threshold.

Know Your Rate: Small Business Corporation Tax Rates for 2027

A small business corporation (SBC) is a private company or close corporation that meets SARS's criteria, including gross income of no more than R20 million a year and shareholders who are all natural persons. Qualifying companies pay tax on a sliding scale instead of the flat 27% company rate. For years of assessment ending between 1 April 2026 and 31 March 2027, the brackets are:

The difference is significant. On R400 000 of taxable income, an SBC pays R25 970, while an ordinary company pays R108 000.

Before year-end, confirm nothing has changed that could disqualify you: a company or trust becoming a shareholder, most shareholdings in other companies, or gross income creeping past R20 million.

Small Business Tax Deductions to Bring Forward

A deduction saves you your marginal tax rate, not the full amount spent. That's at most 27c per rand for a company and up to 45c for a sole proprietor. So only spend on what your business genuinely needs, but if it does, spending before year-end brings the tax benefit forward by 12 months.

Buy and use assets before 28 February

SBCs can use the accelerated allowances in section 12E of the Income Tax Act. Manufacturing equipment is written off 100% in the year it's first used, and other assets at 50%, 30% and 20% over three years.

That first-year allowance isn't reduced for the months you owned the asset, so a laptop bought in February gets the same deduction as one bought in March. Sole proprietors and other companies claim normal wear and tear instead, and small items under R7 000 can generally be written off in full. Either way, the asset must be in use, not just ordered, by year-end.

Write off bad debts

If a customer will never pay, you can deduct the debt, provided you included it in income earlier and formally write it off before year-end. Keep records of your collection attempts in case SARS queries the deduction.

Top up your retirement annuity

Contributions to a retirement annuity, pension or provident fund are deductible up to 27.5% of the greater of your remuneration or taxable income. From 1 March 2026, the annual cap rose from R350 000 to R430 000. Payments must reach the fund by 28 February to count this year.

Get Provisional Tax and VAT Right Before Year-End

Provisional tax lets SARS collect income tax during the year rather than in one lump sum. For a February year-end, the second payment is due by 28 February 2027, based on a realistic estimate of your full-year taxable income.

If your taxable income exceeds R1 million and your estimate falls below 80% of the final figure, SARS can levy an underestimation penalty of up to 20% of the tax shortfall. A voluntary third payment after year-end can limit interest, but it won't remove that penalty.

VAT deserves a look too. From 1 April 2026, compulsory registration applies once taxable supplies exceed R2.3 million in 12 months, up from R1 million. If your turnover sits between the two figures, you may now have a choice. Deregistering has its own costs, including VAT on assets you still hold, so get advice before you act.

This is exactly where up-to-date books make the difference. Saber Accounting prepares management accounts and provisional tax estimates for small businesses, so your February payment rests on real figures rather than a guess.

Start Your Year-End Tax Planning Now

Year-end tax planning comes down to timing: the right assets, write-offs and contributions, made before 28 February, and a provisional tax estimate grounded in real numbers. With this year's Budget lifting the SBC threshold, the retirement deduction cap and the VAT threshold, South African small business owners have more room to plan than they've had in years. That room only helps if you use it before the books close. Start with your management accounts now, and leave February for fine-tuning rather than damage control.

Ready to get your finances in order? At Saber Accounting, we help South African small businesses stay compliant, cut unnecessary costs, and make smarter financial decisions. Whether you need help with year-end tax planning, provisional tax estimates or bookkeeping, our expert team is here. 👉 Book a free consultation today