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Who takes the fall if SARS finds something wrong with your company's tax records?

by , 22 August 2014
If SARS audits your company and finds something faulty, everyone will start pointing fingers.

After all, no one wants to take the blame for an error in your finances.

But who actually takes the blame in this situation?

Is it you, the business owner?

Is it your accountant? Your tax consultant?

Read on to discover the answer...

 

An individual can't be liable for the tax of the company it represents

 
Your company isn't a natural person and it relies on the representation of other people to run. Now you'll normally have one person who's the representative taxpayer for your company. This person is your public officer. But he's simply representing your company, so he can't take the fall for your tax error.
 
SARS will address all communication with your company about tax matters to your public officers. You, as the business owner, can be this public officer, or you can appoint someone else. 
 
But none of this means that your public officer can take the fall for your company if SARS finds an error because he's only representing it.
 
This means no one can take the fall for your company's tax error. It's not a natural person and they must bear the punishment as an organisation.
 
But you can still internally handle this situation, just do it carefully.
 
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Here's how to internally handle the situation if SARS finds an error in your taxes

 
You should find where the error happened because it may have been a miscalculation or error from lower down in your business structure.
 
Once you find where the error originated, find out why. Then take steps to ensure it doesn't happen again by creating clearer guidelines. 
 
Just don't be quick to punish an employee for a tax error as he probably didn't do it intentionally.
 

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