This example illustrates the danger of using a cheap tax practitioner
To illustrate our point, here's an example of someone who works for a winery and who earns most of her income as commission. For the 2014 tax
year, 80% of her income was commission.
As a consequence, she wanted to use the services of a tax
practitioner to help her with her tax
However, she knew she could claim her business expenses against her income but she didn't want to deal with the complexity herself. So she found what seemed like an amazing bargain – a tax
practitioner who only charged R200 per return!
But this was just another example of how, you get what you pay for.
Here's what happened: The tax
practitioner didn't know what she was doing on the tax
return and couldn't see a section where a deduction amount was supposed to go. As a result, the tax
practitioner told the taxpayer she couldn't claim the deduction – almost costing her R22 000!
The same risk applies to your business return, the ITR14.
If your tax
practitioner doesn't know what he's doing, and can't find a section on the ITR14 annual tax
return (because he didn't answer the questions on page 1 correctly), you could be losing out on valuable tax
Not only that, but if your tax
practitioner tells you there's no option to claim a deduction ('because the return says so'), it might be a clear indication they're definitely not the correct tax
practitioner for your business.
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Keep in mind that, as a general rule, working with tax
is not an easy job. Even more so for companies with capital allowance or special tax
deductions (like learnerships). If your tax
practitioner makes an error because he can't find the spot in a tax
return to put a deduction figure in, chances are he doesn't know about all the deductions available to your business. Your tax
practitioner should be an expert when it comes to the types of taxes applicable to your specific business.
So don't forget that using a cheap tax
practitioner to do your tax
return can prove very risky! Choose your tax
practitioner on a different basis than that of the price!
Ask for your tax
practitioner's TP number, which controlling body he's registered with, and his experience in your business' industry. If a tax
practitioner is fantastic at individual taxes, it doesn't mean he'll be great at things your your business deals like transfer pricing or