COIDA Nature of Business Change: What the Fund Requires, and Why the Date You Send It Matters

What you pay the Compensation Fund is set by what the Fund thinks you do. If that record is out of date, you are being assessed on the wrong tariff — and the correction is not backdated. It takes effect from the day your request lands. Everything assessed before that stands.

Why classification is the whole bill

Your COIDA assessment is your annual earnings multiplied by a tariff, and that tariff comes from your industry classification — the Fund’s view of your dominant work factor. Two businesses with identical payrolls can pay very different amounts because one is classified as low-risk professional services and the other as construction.

That makes the classification worth more attention than it usually gets. It is set once, at registration, from what you described then. Nothing prompts you to revisit it, and nothing on your assessment notice says “you may be on the wrong rate”. You can check what the figure ought to look like with the COIDA calculator if you want a sanity check before going further.

When yours is probably wrong

You registered as one thing and grew into another. The most common case by far. A company registers as general trading and is now doing installations. A consultancy takes on a manufacturing line. Nobody updates the Fund because nobody thinks of the Fund.

You were classified on a guess. If the original registration was done quickly — often to unblock a tender — the nature of business may have been whatever fitted the dropdown that day.

You stopped doing the risky part. Reclassification runs both ways. An employer who has wound down site work and is now office-based may be sitting on a tariff for work that no longer happens.

An audit surfaced it. A mismatch between declared activities and actual operations is one of the things a Compensation Fund audit is built to find. If that is where you are, start with our guide to closing out a COIDA audit.

What the Fund actually requires

The requirements are published in Government Gazette 42113, Notice 1387 of 14 December 2018, signed by the Compensation Fund Commissioner. They have two parts: an affidavit, and supporting documents that depend on your entity type.

The affidavit must set out a detailed description of the nature of your business activities, the duties of your employees, and any other information that will contribute to the appropriate classification of those activities. That last clause is an invitation, not filler — it is where you explain the split between what you do most and what you do occasionally.

The supporting documents, depending on the entity:

• Proof of registration certificate with CIPC for a business entity, close corporation or company
• Letter of authority (J246) in respect of a trust
• Proof of registration certificate with the Department of Social Development for a non-profit organisation
• Certified copies of the director’s ID for companies
• Certified copies of members’ IDs for a close corporation
• Certified copy of ID for a sole owner
• Proof of SARS registration
• Proof of a SARS Tax Clearance Certificate

The last two catch people out, because they are a tax requirement sitting inside a labour process. If your tax affairs are not in order, that is a separate problem to solve first — on SARS eFiling or with a registered tax practitioner. It is not something ClearComply touches.

The affidavit rule that fails submissions

This is the detail worth reading twice. The affidavit must be signed in front of a Commissioner of Oaths by the owner, trustee or director as listed on the CIPC document or letter of authority, and a copy of that document must be attached.

And then: the affidavit must not be commissioned by any employee of the business entity. It has to be a practising attorney, a police officer, or another officer designated as a Commissioner of Oaths by the Minister of Justice. An employer whose office manager happens to be a Commissioner of Oaths cannot use them here. Get that wrong and the submission is not late — it is invalid.

Twenty-one working days, and the Fund may come and look

The published turnaround is 21 working days from the receipt of all required documents. The qualifier matters more than the number: an incomplete submission does not join the queue at day one, it waits for the missing item and then starts.

The Fund also reserves the right to conduct an inspection to confirm the accuracy of the nature of business. Which is the practical answer to anyone wondering whether to describe the work in whichever way attracts the lowest tariff: the classification has to survive someone walking in and watching what you actually do.

Why the date is the expensive part

The gazette is explicit that the change in business activities and reclassification is effective from the date of receipt of the request by the Compensation Fund. Not from when you noticed. Not from when the activities actually changed.

So if you are on a tariff that is too high, every assessment raised while you think about it is raised at the wrong rate and stays that way. Reclassification fixes the future and leaves the past alone. That is the entire argument for doing it now rather than at the next Return of Earnings.

If a wrong tariff has already produced an assessment you think is inflated, that is a separate route — see disputing a COIDA assessment for how the revision window works. And if the assessment is blocking your letter, you can check your Letter of Good Standing free to see exactly what the Fund currently holds against you.

When it is worth paying for

If your business does one obvious thing and always has, this is a form-filling exercise you can do yourself. It is worth paying when the honest description is a mix — part office, part site, part something seasonal — because the wording of the affidavit is what determines the tariff you live with, and there is no second attempt once the Fund has classified you on it.

ClearComply does not reclassify anyone and does not act for the Compensation Fund. A registered labour practitioner prepares the affidavit and supporting pack and submits it on your behalf. Business Nature Change is R7 200, all in. Tell us what your business does now and you will get a straight answer on whether it needs help at all.

Questions we get asked

Will my assessment definitely go down? No. Reclassification puts you on the correct tariff, which is sometimes higher. Anyone promising a reduction before seeing what you do is guessing.

Can I change it during the ROE window instead? You can submit at any time, but the two are separate processes and the reclassification is still only effective from receipt. Waiting for the ROE window just means more assessments raised on the old class.

What if I have several trading activities? The classification follows the dominant work factor, which is why the affidavit asks for employee duties and not only a description of the business. Describe the split honestly and let the Fund classify it.

ClearComply is a private commercial software provider and is not affiliated with, authorized by, or an official agency of CIPC or any government entity. We are not the Compensation Fund or the Department of Employment and Labour. Letters of Good Standing are issued by the Compensation Fund, not by us.