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Avoid a crippling SARS fine. Don't make these three common business tax deduction mistakes

by , 14 May 2014
Do you know what happens if you try claim the wrong tax deductions from SARS? Well let me tell you: The best case scenario you'll face is additional penalties or a fine. At worst, you could end up facing criminal charges.

When it comes to your taxes these mistakes SARS don't take mistakes taken lightly.

Oh no. It treats these mistakes as major infringements and in, some cases will treat it as tax fraud.

That's why you need to make sure you never claim the wrong deductions wrong. And you can do that by not making these three tax deduction mistakes that will attract unwanted attention from SARS.

Avoid costly tax issues
Don't pay another cent on expensive tax consultant or lawyer fees

Three tax deduction mistakes you MUST avoid at all costs

First mistake: Not knowing the difference between the tax deductable expenses. For example, did you know a company car allowance and travel allowance isn't the same thing? 
Plenty of business owners get this wrong though. They assume it's the same deduction and they end up with a fine rather than cash back.
Second mistake: Confusing individual tax and Company Income Tax (CIT). 
For new business owners it's not uncommon to make this mistake. But remember CIT is very different from personal income tax also called Pay as You Earn or PAYE. These have different deductions and SARS won't be impressed if you try claim a personal tax deduction on company taxes.
And there's one more, big mistake you need to watch for...
12 Taxable fringe benefits - are you taking advantage of all of them?
There are hundreds of companies out there that don't know which fringe benefits are taxable or they land up taxing the wrong percentage on them... 
This kind of error could cost you thousands in penalties to SARS if it catches you out – and it will!

The last big tax deduction mistakes you must avoid

Third mistake: Thinking tax deductions happen automatically. Some beginner business owners have made the mistake of thinking that tax deductable expenses come off from your tax automatically. This isn't true. You must include the tax deduction claim on your income tax filing.
This won't get you in trouble with SARS, because it doesn't really want to give you back the money, but you will lose out. And don't forget about the seven deductions you can claim.
There you have it: Avoid these mistakes and you'll manage to claim business tax deduction from SARS without receiving unwanted penalties. 

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