HomeHome SearchSearch MenuMenu Our productsOur products

Avoid these seven tax traps when you prepare for a tax audit

by , 03 January 2017
Avoid these seven tax traps when you prepare for a tax auditAs FastJet airline can tell you, a tax audit is no joke. The amount of tax FastJet has to pay Tanzanian authorities almost doubled when interest and fines were added to the outstanding taxes. .

Here in South Africa, it's no longer a question of whether or not a business will be subject to an on-site tax audit; it's a matter of when.

If your business is facing a tax audit, there are seven 'tax traps' you need to avoid to make sure you steer clear of hefty penalties and interest.

******** Recommended *******

Surviving the SARS audit mine-field…
 
Your audit could be around the corner! And SARS is hungry for money!

If you're not careful, an audit could burn an irreparable hole in your wallet.
 
Here's how you can keep your hands on your money…


********
 
Avoid these seven tax traps when you prepare for a tax audit continued...

FastJet has to pay Tanzanian authorities over £1 million for not paying property taxes and airport departure charges for close to a year.

As if that's not enough, this amount almost doubled when interests and fines were added in a tax audit.
 
But it's businesses that are the hardest hit when SARS does a tax audit.

It's easier for SARS to collect unpaid taxes from employers than employees.  

If your business is facing a tax audit, there are seven tax traps you'll need to steer clear of to avoid hefty penalties and interest now that SARS has intensified its tax audit regulations, FSP Business reports.
 
Let's have a look at them.
 
********* Advertisement *********

Protect your rights when SARS comes knocking on your door!

Don't let SARS bully you – you have rights! Get off the back foot and exercise these three rights when SARS audits you:

  1. SARS must give you at least 21 days' notice. If you need more time, request an extension.

  2. You're entitled to request reasons for any adjustments SARS may make, so insist on getting the answers you may need!

  3. SARS has no right to invade your privacy in the name of an audit. Personal records and your home may not be searched by SARS without a warrant.

Try our complete Practical Tax Handbook today. As part of this service you'll receive the Practical Tax Handbook, five bonus reports, 10 updates, a lifelong subscription to the daily Tax Bulletin, and access to the a Tax Helpdesk, where you can ask our tax experts any tax question.

*********

Seven tax traps to avoid as they'll lead to huge penalties from SARS if you're under tax audit

Tax Trap #1 – Hidden assets that you haven't included as 'assets and liabilities' in your tax return.

Tax Trap #2 – Hidden interest you've received on investments and not included when completing your tax return.

Tax Trap #3 – Troublesome lease agreements

Tax Trap #4 – Faulty invoices

Tax Trap #5 – Calculating your provisional taxes incorrectly

Tax Trap #6 – Not declaring fringe benefits such as a car and a house

Tax Trap #7 – The wrath of disgruntled ex-employees who know the status of your finances.
 
If you're facing a tax audit, you'd better make sure you've steered clear of these tax traps. If you've already fallen into one, own up by explaining the situation to SARS – it's better than claiming innocence and facing hefty penalties when the truth comes out.

For more information on tax audits, get your hands on the Practical Tax Handbook.

We've got a dedicated chapter on Tax audits in the Practical Tax Handbook, in it you'll discover:

  • Six objectives SARS must meet

  • Are you at risk of an audit?

  • Four types of SARS audits

  • What documentation will SARS request in an audit?

  • Six things to remember when it comes to a SARS audit

The key to getting through a SARS audit is preparing for it before your unwelcome guests arrive. Reduce the headache of a SARS tax audit today.


Related articles




Related articles



Related Products



Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>