The Taxman Come'th - Trying to help someone sort out their taxes after several years of nonpayment

[zolly]

So reviving this discussion. Sat down with the person in question and did most of their numbers just for this year, and it seems like we both underestimated this situation. She's going to go back and get her numbers together for the previous years (she last worked for only one employer end of 2016) before we apply to SARS for their voluntary disclosure program.

In the meanwhile, I have found a few tax consultants online who have experience dealing with this, but does anyone have any recommendations? I think it makes sense to get someone who can help us navigate this situation and deal with SARS for us, even if it costs a bit upfront, rather than just accepting everything SARS puts on our plate.

 

[XPD]

Also following this keenly for any recommendations on tax consultants.

 

[RedViking]

I registered for provisional tax (first time I got a tax number). Went to an accountant and Back dated it to 3 or 4 years. IRP6 and ITR12's. Worked out about 7-10K per year. Just completed everything, got the amounts. Paid it. I might be wrong, but don't think there were any penalties. They were also willing to work on a payment plan but I managed to sort it out. But once I was registered and thought everything was up to date, I got myself into the unfortunate position of having skipped one year. Think this time it was closer to 15 or 20K for the year as there were penalties and interest or something.

Although it was stressful, I made an appointment with SARS and it was pretty easy talk to them and sort it out. The gentleman back then was very helpful.

I did however put money aside every year. I just didn't know how to register as a Freelancer. I got mostly a set income from a company in New Zealand. But I had no contract or payslip or anything that showed I do work for them. Eventually I just registered for provisional tax. The year I skipped was a mess though as I thought everything was up to date. Had to empty my savings for that one.

Word of advice, don't assume a tax consultant knows what they are doing. Also don't assume they have completed everything. They will not take responsibility if something goes wrong. YOU need to log into your efiling and YOU need to check they completed each year as well as the returns for each year. YOU need to check the calculations and query if something does not look right.

 

[Johnatan56]

If you receive only income from one employer for the full tax year (12 months) and you are under the threshold then no need to file.

The issue is that most people get some interest income which automatically mean that they must submit a tax return.

Pretty sure that is wrong, it's if over the interest earnings cap: https://www.sars.gov.za/tax-rates/income-tax/interest-and-dividends/

If you have a medical aid then you must submit.

Nope, only if you want to claim credits.

If you contribute to an RA or tax free savings account then you must submit,

Nope, only if you want to claim against tax paid by e.g. employer. Also pretty strange to contribute to RA or TFSA if you don't need to pay income tax.

irrespective if you are under the threshold. If you change jobs during the tax year then you must submit. There are very few people that qualified for no tax return submission based only on the income threshold.

Again, you must submit if over the threshold, if you swap jobs as a domestic earning under the income bracket, it really doesn't matter.

 

[DA-LION-619]

Pretty sure that is wrong, it's if over the interest earnings cap: https://www.sars.gov.za/tax-rates/income-tax/interest-and-dividends/

Nope, only if you want to claim credits.

Nope, only if you want to claim against tax paid by e.g. employer. Also pretty strange to contribute to RA or TFSA if you don't need to pay income tax.

Again, you must submit if over the threshold, if you swap jobs as a domestic earning under the income bracket, it really doesn't matter.

The threshold for filing(PAYE) is 500k.
People are conflating the threshold for paying income tax with submitting a return.

Filing a return is always in your best interest.

 

[quovadis]

Thanks. Was unaware of this. She has been paying medical aid. Not sure about any job changes.

Get a seasoned personal tax person if the liability motivates the cost and ask them to assist - it will usually be the previous 5 tax years and they will assist and haggle on your behalf in terms of penalties and payment terms if necessary. It’s a lot easier than trying to navigate sars’ varying levels of pain.

 

[zolly]

Get a seasoned personal tax person if the liability motivates the cost and ask them to assist - it will usually be the previous 5 tax years and they will assist and haggle on your behalf in terms of penalties and payment terms if necessary. It’s a lot easier than trying to navigate sars’ varying levels of pain.

For sure. We've done this and I responded to your PM. Shot for the advice though. Someone else might need it in the future.

 

[XPD]

For sure. We've done this and I responded to your PM. Shot for the advice though. Someone else might need it in the future.

Would you mind pm details of the tax person you used.