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Four steps to follow when you're held liable for someone else's tax debt

by , 02 October 2013
A representative person (also called a representative taxpayer) is anyone who is responsible for paying the tax liability of another person or company. This means as a representative taxpayer, you'll be held personally liable if you withhold tax and don't pay it over to SARS. Or, if you should've withheld tax in terms of a tax Act and paid it over to SARS instead. Read on to discover the four steps to follow when you're held personally liable for someone else's tax debt so you don't end up in jail for someone else's mistake.

As you know personal liability is when you're held responsible for someone else's tax debt.

If you don't know the correct procedure for handling matters relating to personal liability, you could end up in jail for someone else's mistake.

To make sure you understand what SARS's holding you personally responsible for, be sure to follow these four steps.

Have you been held personally responsible for someone else's tax debt? If so, follow these four steps

Step#1: Get all the details of SARS' claim. You can call 0800 00 7277 or go into any SARS branch. The SARS branch will look into the case and give you notes and reasons for a specific decision. This'll ensure you understand what and whose taxes it's holding you responsible for.

Step#2: Get all the necessary documentation and information together about SARS' claim.

Step#3: Send an objection to SARS. You can submit the objection electronically or you can fill in an ADR 1 form and send it to SARS within 30 days of the date of the notice.

Step#4: Submit your objection and make sure you have proof of submission from SARS (electronic verification or SARS' stamp on the documentation).

'Ensure you've submitted the objection within 30 days of the first assessment to ensure you're within the time frame allowed. This way you'll avoid being penalised for being late,' says the Practical Vat Loose Leaf Service.

Don't panic when SARS sends you a letter of personal liability. Get the facts and then react.

Knowing what to do when you've been held personally liable for someone else's tax debt will help ensure you follow the correct procedure and avoid ending up in jail for someone else's mistake.

To reduce your risk of personal liability, remember these two points:

  • Always be honest, ethical and have integrity when representing a person or entity.
  • Perform due diligence on any information given to you and if you're unsure, ask until you're satisfied your submission's correct.


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