Four steps SARS has to take before removing money out of your bank account
The money in your company's bank account isn't totally under your control! SARS can demand you pay someone else's taxes. With the Tax Admin Act telling taxpayers that ignorance is no excuse, make sure you know your rights and how to prevent SARS from taking money out of your bank account.
For SARS to recover any tax debt, you have to receive an assessment. And the assessment should be correct. If SARS removes money from your bank account without any assessment, approach SARS immediately. And if SARS can't provide you with a proper assessment, contact the tax Ombudsman immediately.
If SARS does this without an assessment, you can take SARS to court and sue for damages.
There are steps SARS takes when they come after you. And knowing what they are will empower you to keep SARS in line. Let's have a look...
How to make yourself invisible to SARS
The key to reducing how much tax you pay is staying off SARS' radar.
SARS has conducted R1.8 million audits.
They've added 100s of new tax collectors and auditors to their payroll and each one has his own collection targets to meet.
This means two things:
- If you're not compliant, your chances of an audit this year have just doubled, and
- You will pay more in penalties.
But there are 139 perfectly legal ways for you to make yourself invisible to SARS.
Four steps SARS takes when coming after you
SARS will always start with the person/company charged with the primary tax liability to recover the funds from them (i.e. the actual taxpayer).
SARS will give you notice of your tax liability due and payable. SARS will request payment within a specific period. If you can't pay SARS within the required time, you must ask SARS for a deferral of payment letting you pay the debt off over an agreed period (Section 167 of the TAA).
SARS might let you pay off the debt over a fixed term.
If SARS can't recover funds from the primary source then they'll look if there's a 3rd party they can hold personally liable for the outstanding tax debt.
SARS will approach the person/s to find out if they can recovery any taxes directly from them.
What you'll discover in the Practical Tax Handbook:
Best of all, get your risk free copy of the Practical Tax Handbook now and if you're not happy, simply return it within 30-days for a full refund!
22 checklists to use in assessing your tax audit risk
13 items SARS will check during an audit
Four expenses SARS will target
11 questions SARS will ask you
What to do when an assessment is issued
Documents you must retain for your audit
The risk areas on your balance sheet
How to minimise your payroll risk
The general checks in a Vat audit
Real-life case studies
What questions to ask when disputing an assessment
SARS needs to tell you they're holding you personally liable for tax debt. They must explain the reason for their assumption.
They have to send you a letter that's dated and then issue an assessment of the tax debt. This will have the same criteria of a normal tax assessment (Section 179 of the TAA).
The responsible person can tell SARS why they can't comply with SARS' instructions (Subsection (2)).
SARS can only do this after they can prove they've sent through a final demand for payment to the actual taxpayer (or one of the persons liable per step 2), at least 10 days before approaching you as a liable 3rd party.
SARS will take the person held responsible to court and ask that funds be recovered via a judgement or an application for liquidation or sequestration.
The person being taken to court could be the taxpayer, the responsible person, or even you as a 3rd party.
Note: 4 of 3 votes