SARS has its eyes on these taxpayers
The South African Revenue Services is now looking at tax representatives as it progresses further into clamping down on non-compliance by companies.
It is important to note that tax representatives can be held liable in their personal capacity for the debts of their companies. This might seem unfair to many however it is perfectly legal and within the scope of the Tax Administration Act.
SARS is under pressure to increase revenue as the country will face another deficit this year. Many blame this on excessive spending alone however what we are experiencing today as an economy is deeply rooted in mismanagement whether you look at it from a government and private sector perspective.
Compliance is now becoming a very large part of SARS's efforts to collect, and rightly so. Now is the time for tax representatives and taxpayers to look closely at their compliance status and to action any shortcomings.
SARS Debt collection has been ramped up and they have invested in new skills to ensure that tax debt is collected. This process is already well under way with many individuals now being notified of their personal liability with regards to their companies they represent.
Even though SARS has become more aggressive with tax collections, it still allows taxpayers the opportunity to challenge their personal liability in these cases. Important to note is that this can require the taxpayer to possibly submit bank statements, supporting documents and declarations as to where the money was spent instead of paying the taxes and/or penalties.
In addition, with a dispute on personal liability SARS can also request the financials of a taxpayer or trader to get clarity and certainty that there was no mismanagement of the entity and funds. Focus will be on whether the financial duties of the directors and finance team were performed correctly.
Taxpayers are urged to pay special attention to letters of personal liability as the window to remedy the non-compliance is very narrow (only 10 Business Days). Tax compliance is now vital because SARS has knowledge of what is going on in bank accounts, SARS has already debited non-compliant taxpayers directly from their bank accounts to recover the monies owed on taxes and penalties.
The SARS Notice of Personal Liability has very specific power of being able to take drastic action to collect from taxpayers who don't respond in a timeous manner.
This is where is gets even more serious. The new Notice of Personal Liability could see the following actions taken:
- SARS will contact your bank directly and collect
- SARS Can collect from anyone who owes you money
- SARS can also institute sequestration of your estate
What is our advice on how to deal with the SARS Personal Liability Notice?
Ensure you are the one to make the first move by being on top of your compliance. If SARS has to come chasing, then this is usually where it gets very uncomfortable.
Sign up with a tax practitioner who can help you work through your backlog and get your tax affairs in order.
Do you need a Quote for our Tax Services?
Contact our team via any of the following channels to get a proposal for your accounting and tax services:
Subscribe to our newsletters.
Disclaimer:
The views or opinions expressed on this site are solely those of the original authors and other contributors. The material and information contained on this website is for general information purposes only.
This information is for general purposes only. Don't use this information for making business, legal and tax decisions without consulting a professional.
We do not make any express or implied representation, as to the completeness or accuracy of the information published.
Tax law changes regularly, and any tax information on this site might be outdated.
Links to this website may lead to other websites outside our control and we accept no liability in respect thereof.
ZPA accepts no liability for any loss or damage arising from the use of any material on this site.
