Six Tips To Make Sure Your Tax Affairs Are In Order

As a taxpayer, even a simple error might lead to severe penalties. Your best option to prevent this from happening, is to clean up house. 

Take a look at  the following six steps – they are guaranteed to help you keep your name clear!



1. Have all the aspects of your tax affairs reviewed by a tax practitioner – this includes income tax, employee's tax, VAT, everything. This process will help you to see which areas are at risk and also show you the seriousness of it, which will help you decide whether you should consider voluntary disclosure to SARS.

 

2. It is imperative that you keep proper records and keep all the documents that you will need to hand in to SARS.  Don't be shy to spend money on this – going cheap might work out more expensive in the end.

 

3. Make sure you receive proper advice before taking a tax position.  When it is done, it cannot be reversed and you might not have made a properly informed decision.

 

4. Don't set your hopes too high.  Tax is hardly ever fair and SARS allows very few loopholes. Remember, if something sounds too good to be true, it usually is – even your tax position.

 

5. Don't try to cut corners by manipulating estimates and payments according to what you feel is fair. This might lead to possible investigations and payments and is definitely not worth it.

 

6. Make sure you use a tax practitioner that it compliant.  If their affairs aren't in order, chances are they won't put yours in order either.  You are still responsible for what you hand in to SARS, regardless of whether you make use of a tax practitioner.

 

Experience has proven that, no matter how hard you try, some errors might still happen.  It is important to note, though that taxpayers will no longer escape additional tax on their errors under the new TAA.  That is why the use of a tax practitioner is so strongly recommended as it helps the taxpayer limit these errors.

 

The new understatement penalty regime has swung the odds of collecting more tax revenues squarely in favour of SARS and taxpayers must be extra vigilant in their affairs. These measures might seem harsh, but there is value in remembering that SARS retains substantial powers when collecting debt that it is owed.

As the TAA is still very young, it will inevitably make amendments and additions, even while taxpayers and SARS still learn the full effect of the Act.

 

In the meantime, pay close attention to your affairs and don't bend the rules in any aspect of your tax life.