HomeHome SearchSearch MenuMenu Our productsOur products

SARS can get it wrong too, here's one situation where it did

by , 01 July 2014
SARS, as an organisation, employs people such as auditors, agents and financial experts. This means, as with any other organisation, it's vulnerable to human error.

As a result, SARS can actually get it wrong sometimes. That's why it's important for you to understand the law, such as Section 23(m) of the Income Tax Act.

With this information, you can back up your claim in situations like this one where SARS got it wrong...

*********** Hot off the press  ************
Legally pay less tax

Here's a situation where SARS misquoted Section 23(m) on wear and tear allowances

The experts behind Practical Tax Loose Leaf Service receive a lot of interesting tax questions. 
One business owner told our experts he applied for a depreciation allowance on his cell phone and the response he got back from SARS disallowed the claim. This was the reason:
'Depreciation for cellphone amounting to R840.00 claimed against employment income doesn't qualify as a deduction in terms of Section 23(m) of the Income Tax Act'
The auditor who handled this claim then misquoted Section 23(m). He only quoted the part of Section 23(m) that states you can't claim any deductions if you earn your income through commission. However, this auditor got it wrong because he left out the next part…

Here's what Section 23(m) really says about wear and tear allowances

This SARS auditor forgot to consult the next part of Section 23(m). Here it says this business owner can claim any allowances and expenses outlined in Section 11 (c), (e), (i) and (j). 
In this Section, it says you can make a deduction if it: 
- Isn't capital in nature; or
- Comes from bad debt.
So keep up-to-date with the tax laws in the Income Tax Act to ensure SARS' rulings are fair and legal. 
*********** Advertisement ************
Every South African tax law explained by our experts
All the definitions and legal regulations, useful advice, exceptions to the rules that help you slip through the legislative jungle of taxes. 
Case studies and practical examples that show you what elements you should consider for your taxes to be perfect.
Red flags you need to watch out for and the penalties you'll face if you don't respect them.
Sample templates at your disposal, ready to be filled in, customised and printed. 

Related articles

Related articles

Watch And Learn

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 >>>