Tax Relief for business owners.
Unpaid SARS debt can wreak havoc on a business, forcing many to close their doors.
In a frantic search for a solution, many owners try to put the problem on hold by withholding their tax returns. This is a criminal offence and merely serves to intensify the problem.
Who is liable for a company’s tax debt?
A company or close corporation is a legal entity in its own right, and any debts incurred are its responsibility. As a general rule, the directors and shareholders of a company and the members of a close corporation will not be held personally liable for the entity’s tax and other debts unless they have signed surety.
Should it be found, however, that the directors, shareholders or members have acted fraudulently by not paying their tax debt and/or submitting their tax returns, an application can be brought to lift the company veil and hold the directors, shareholders or members personally liable for the business entity’s debt.
We can help
Tax Debt Compliance offers a range of tax relief mechanisms that helps struggling businesses effectively manage their SARS debt, putting them back on the path to success.
Deferral Payment Agreement
Unpaid taxes, as well as penalties for non-payment, can negatively impact your business and cause you considerable stress.
Based on your cash flow, Tax Debt Compliance negotiates an affordable monthly instalment amount with SARS on your behalf, ensuring you retain your assets and avoid prosecution or jail time.
Be proactive and start to plan and search for solutions in order to repay the money owed to SARS. The problem will not go away by ignoring it or placing it on hold. Do not stop submitting returns even if you know you cannot make payments, it’s a criminal offense not submitting returns.
There are repayment mechanisms available to you, understand what they are, what they do and what your options are. Start to engage and use those mechanisms to find a solution that will allow you to become compliant once again.
A company or close corporation is a legal entity in its own right, and debts incurred by the entity are its responsibility. As a general rule, the directors and shareholders of a company and the members of a close corporation are not personally liable for the entity’s tax and other debts if the entity turns out to be unable to pay them.
Personal liability for the entity’s debts will be incurred only where there is a piercing of the corporate veil, either at common law or under statute. The Tax Administration Bill, Bill 11 of 2011 (the TAB) contains several provisions in terms of which directors, shareholders and members of companies and close corporations can incur personal liability for its tax debts.
Tax Debt Compromise
A compromise application is administered under section 200-202 of the Tax Administration Act. Tax Debt Compliance assesses your situation and submits a compromise application to SARS that accurately reflects the status of your business. If approved, the compromise enables the taxpayer to settle tax debt at a reduced amount.
A compromise application is administered under sections 200-202 of the Tax Administration Act. A compromise, if approved, will allow a taxpayer to settle their tax debt at a reduced amount.
Tax Debt Compliance can take care of your SARS debt through the provision of bridging finance, a short-term loan for SARS debt emergencies. This enables you to repay us within a suitable timeframe, giving you breathing space and your business much-needed recovery time.
High Court Review Applications
The Promotion of Administrative Justice Act permits taxpayers who believe that SARS has not followed protocol regarding their tax affairs to apply to the high court for a review of the administrative steps taken by SARS in reaching its conclusion.
Tax Debt Compliance assists taxpayers by submitting the high court review application on their behalf. Should the court find that SARS has failed to adhere to the correct procedures, it will direct the revenue service to reconsider the matter.
What is the process of a High Court Review Application?
Application can be made to the High Court in order to review the administrative steps taken and considered by SARS in order to arrive at their conclusion. When you are not in agreement with these steps and considerations and you are of the opinion that SARS has not applied itself correctly, the Promotion of Administrative Justice Act (PAJA) allows you to present an application to the High Court in order to review these steps and considerations. If the High Court finds that SARS has not applied itself correctly they will direct SARS to reconsider the matter by correctly applying itself and to take into consideration all the relevant information
Voluntary disclosure programme
Taxpayers who declare no or an incorrect amount on their tax returns not only face prosecution but also penalties of up to 200% on any undeclared amounts.
The voluntary disclosure programme, administered under sections 225-233 of the Tax Administration Act, seeks to enhance voluntary compliance with the tax system by encouraging taxpayers to voluntarily come forward to regularise their tax affairs with SARS and thus avoid paying penalties.
Tax Debt Compliance assists taxpayers by submitting the application on their behalf.
The Voluntary Disclosure Programme (“VDP”) is administered under sections 225-233 of the Tax Administration Act. The purpose of the VDP is to enhance voluntary compliance in the interest of good management of the tax system and the best use of SARS resources. The VDP aims to encourage taxpayers to come forward on a voluntary basis to regularise their tax affairs with SARS and avoid the imposition of understatement penalties and other administrative penalties.
Tax Due Diligence
Tax Debt Compliance conducts a comprehensive health audit of your business to identify any potential tax pitfalls. This is a wise course to take to avoid any future nasty surprises.
Tax Clearance Certificates
A tax clearance certificate is issued by SARS to compliant taxpayers who have submitted all their returns and have no outstanding debt. Valid for one year, a tax clearance certificate is essential for acquiring new business, contracts and tenders.
Taxpayers who have outstanding tax debt will need to reach a formal payment arrangement with SARS before a tax clearance certificate can be issued. Tax Debt Compliance assists in the negotiation of a formal payment arrangement and the application of a tax clearance certificate.
A Tax Clearance Certificate can only be acquired once a taxpayer is compliant with SARS, therefore all returns must be submitted and no outstanding monies owed to SARS. Alternatively, if you have tax debt with SARS, you will need to reach a formal payment arrangement with SARS before a Tax Clearance Certificate can be obtained.
Why you may need our services
Companies are obligated to pay VAT (value added tax) on the services they provide, as well as PAYE (pay as your earn) tax on behalf of their employees.
Should your business encounter a cash flow crisis which renders you unable to pay VAT or PAYE, Tax Debt Compliance negotiates with SARS on your behalf for an equitable resolution to the problem.
SARS Criminal Prosecution
People can face SARS criminal prosecution for failure to pay taxes.
You may not have understood how SARS works, or perhaps you buried your head in the sand too long due to feeling overwhelmed. Whatever the case, it’s not as if you are a criminal…we give you the tools to understand tax compliance in a simple way and give you tax relief by acting on your behalf.
A legal notification from SARS to inform the taxpayer they are going to take action against them.
By the time SARS issues a summons, you stand to lose something or everything. SARS can take money from your account without advising you; they can prosecute you as if you were a criminal, and they can take your assets as payment for outstanding SARS debt. With our 100% success rate, no clients that we have worked for have faced any type of loss. We can help you avoid loss, prosecution, or jail time.
A judgment is a court order made against a taxpayer and essentially gives SARS the authority to use the legal means available to them in order to collect the outstanding debt i.e. attaching and selling off assets, attaching and ordering debtors to pay any outstanding money over to SARS etc.
A document from SARS to show how much tax a person or business owes, and by when payment must be made before further steps will be taken by SARS.
Tax Debt Compliance empowers you with knowledge about how to handle a tax demand, or we take over the process on your behalf so that you don’t have to spend time or effort on it.
Answer the phone. Do not ignore the call, the problem will not go away. Engage with the SARS official and explain your situation. Do not commit yourself to any payments and/or deadlines if you know you cannot achieve it.
This is a final demand from SARS to repay the debt and/or submit outstanding returns before further collection steps are taken. It is important to immediately engage on the matter and to use the repayment mechanisms available in order to halt further collection steps. If SARS receives no response from you within the allotted time on the final demand they will continue with their collection steps i.e. attaching money from your bank account.
SARS Liquidation Threat
SARS debt can lead to the liquidation of the company. If the company cannot pay its debts, it’s Directors can be held personally liable for the debt if certain criteria are met.
If you still have turnover, we’ll negotiate a way forward for you with SARS, so that the threat of liquidation is removed.
A director or member does not become liable automatically. However, you will be liable for those debts of the company or close corporation for which you have signed surety, irrespective of whether you are a director or member.
If you have acted fraudulently or grossly negligent (i.e. by not paying your tax debt and/or submitting your tax returns), an application can be brought against you where the company veil will be lifted and you will be personally liable for all the company or close corporation’s debt.
SARS Interest and Penalties
SARS debt accrues interest and penalties with every late payment submitted after a certain date.
We’ll audit your situation, come up with a payment plan, and show you how to handle future tax so as not to pay extra on penalties.