Employers to warn employees to get their tax affairs in order

Employers will soon become the tax man’s greatest ally when it comes to forcing tax defaulters to pay what they owe government – and SAIPA, the SA Institute of Professional Accountants, is warning them to co-operate, or they may face tough consequences themselves. SARS recently started sending out notices to employers, informing them of its plan to recoup administrative penalties from defaulters by asking employers to withhold portions of employee salaries.

“Naturally, an employer may have sympathy with the employee, especially if the person concerned is facing financial difficulties,” says chairman of SAIPA’s National Tax Committee, Ettiene Retief. “But failure to do anything but comply with SARS’ instruction will be a big mistake.”

Last month, SARS started sending notices to employers, listing names of employees against whom they may act in the near future, requiring employers to withhold portions of salaries.

“Employers now have the responsibility of warning these employees to get their tax affairs in order, before they themselves are forced to pay their earnings to SARS.”

“Next SARS will send out physical notices that will state exactly how much money is to be withheld from which employees,” he says. Failure to do so will result in the employer being made to face consequences that may include making the employer responsible for the money due to SARS.

“The message is clear: comply with SARS’ legal instruction and employers won’t get into trouble,” adds Retief. If there is some dispute, it is up to the person concerned to clear up the matter with SARS. “SARS will then inform the employer if the situation changes.”

By taking this approach, SARS is sending out a clear message that it will not tolerate tax offenders, especially by those who repeatedly ignore its appeals, whether it be for tax returns to be filed, for supporting information to be submitted or even those who fail to notify SARS of a change of address.

“This is nothing new. SARS has long required banks to co-operate in recouping funds from tax offenders,” concludes Retief. “There’s no knowing how aggressively SARS will pursue non-cooperative employers. But, the precedent is well-established in this country and it’s best to assume that failure to adhere to SARS’ legal directives will attract the full might of the law.”

Note to employers & employees: Tax reconciliation is due at the end of October. Employees need to ensure that their employers have their correct personal information. Failure to inform SARS address change could attract fines ranging from R250 – R16 000 for each month.

TAXtalk: www.taxtalk.co.za

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