The Greek philosopher Socrates once said that true wisdom is knowing what you don’t know.

If you are here looking for advice to solve a tax problem, then, according to Socrates, you are a very wise person.

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The problem with Tax

As a taxpayer, your focus is making money and you are excellent at it. Unfortunately (depending on your perspective) SARS’ focus is taking some of that money and they are just as good at taking it as you are making it.

But, being an informed and reasonable person, you know, as Benjamin Franklin once said: “in this world, nothing can be said to be certain, expect death and taxes” and so you (sometime resultantly) accept that SARS will take their fair share. But no doubt, you question is, what exactly is their fair share? Valid question.

The answer: their fair share is whatever tax law allows them to take (so called “tax morality” aside). This would have been simple if tax law was simple, you understood tax law as well as you understand your trade/business and SARS always abided by the law. In our extensive experience practising tax law, this is hardly ever the case because:

  • Tax law is tremendously challenging to navigate (even for some auditors, lawyers and accountants who are often our clients);
  • You are a specialist in your chosen field/area, not a tax specialist; and
  • SARS needs to ensure compliance with tax laws by thousands of taxpayers. It is arguably impossible for SARS to have the best tax experts auditing all taxpayers.

This sets the scene for situations where, unbeknown often to you, SARS (whether by mistake or not) is taking more than their fair share.

How our clients experience our service

Throughout our dealings with Unicus Tax, we have experienced an outstanding level of service. We have found the following: - Expert level of knowledge in the vast number of tax specialty areas affecting our tax affairs; - Immediate or exceptionally prompt response, to all questions and service requests; - A distinctive appreciation and consideration of the practical, business application / impact of advice provided; - Fair fees considering the levels of service provided and effort / time involved.

Michael Franas CA (S.A.)

Financial Director - The Doshi Group of Companies - South Africa
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Confidential

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Reliable

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Accessible

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Trustworthy

Examples of how we have helped others

SARS not releasing tax refund

A taxpayer was assessed to a refund (corporate income tax) in respect of its 2017 year of assessment in the amount of roughly R8m and in respect of its 2018 year of assessment in the amount of roughly R6m. The 2018 year of assessment was under audit. The 2017 refund came about in a reduced assessment consequent upon a successful dispute process.

SARS refused to release the 2017 refund on the basis of the 2018 audit. The taxpayer formally requested the 2017 refund. This was rejected by SARS on the basis of the ongoing 2018 audit. The approach adopted and which resulted in payment by SARS not only of the 2017 refund but also (for some reason) the 2018 refund (despite the fact that the audit was still ongoing at the time and despite the fact no request was made for payment of this refund) was to launch a formal review application of SARS’ decision not to pay the refund, putting SARS to terms – five days. The review application was seemingly ignored. We subsequently launched a High Court application in pursuit of the refund.

The matter never proceeded to trial. SARS conceded and paid the refund.

183/60 day exemption

An individual taxpayer recently realised that he should have been assessed to a refund in respect of his 2017 year of assessment associated with the so called “183/60 day exemption”.

Instead of a refund, SARS assessed the taxpayer to a liability.  The trouble was that the assessment against which an objection lied was more than two years old (but not more than three years old). On the facts of the case there appeared to be no exceptional circumstances that could justify the delay in submitting the objection and hence an objection would almost certainly be rejected. However, on closer scrutiny of the assessments and returns, it came to light that the exemption claim was simply disallowed in the original assessment despite it being correctly claimed on the return. It was also clear that there was no audit or verification conducted.

Clearly then, the original assessment raised by SARS was not fully based on a return/information submitted by the taxpayer. As such, SARS was obliged, in terms of section 96, to include the grounds for the assessment in the original assessment. SARS failed to do so.

Had SARS complied with their obligations under the TAA, the taxpayer (being a layperson) would have been aware of the disallowance of the exemption claim and would have been in a position to lodge an objection on time. In this case, it was successfully argued that SARS’ non-compliance with the provisions of the relevant legislation constituted exceptional circumstances and the late objection was condoned by SARS.

Disallowed PAYE Credits

We recently resolved a case involving a company claiming PAYE credits. The facts of the case are briefly that when the company filed its annual tax return, it claimed PAYE credits. The PAYE credits so claimed however were in fact PAYE paid over by the company in respect of its employees and were not PAYE credits of the company. The reason why it was claimed on the return was that the PAYE credits were prepopulated on the annual tax return – the taxpayer thought at the time that since it was pre-populated on the return, SARS wanted the taxpayer to submit the return as such.

SARS disallowed the credits and imposed an understatement penalty of roughly R2.2 million despite the fact that the PAYE credits were prepopulated on the return. SARS’ argument was based on (a) the taxpayer could not produce evidence that the PAYE credits were pre-populated on the return and (b), even if it was so pre-populated,  the taxpayer must have realised it was a mistake but nevertheless proceeded to submit the return, accepting an illegal benefit.

We ultimately won the case with SARS agreeing to remit the penalty in total. The defence was heavily based on evidence that the PAYE credits were pre-populated, why the taxpayer cannot be said to have accepted any illegal benefit and that this was a bona fide inadvertent error.

Employers’ Tax Obligations

It unfortunately often happens that employers do not comply with their employees’ tax obligations.

Typically these employers do not issue IRP5’s, often leaving the employee in a precarious position when he/she needs to file their tax returns. What to do?

Simply put, the employee needs to declare his/her salary on the tax return and for most part, it appears SARS is not too worried about that. The problems normally start when the employee wants SARS to take into account employees’ tax withheld by the employer (bear in mind that only disclosing the nett amount paid to the employee would constitute an omission of income, should give rise to a USP and would be unlawful).

If there is no IRP5 this can be problematic. In a recent case we dealt with, the employer withheld employees’ tax but there was no IRP5 to be found anywhere and further still, it transpired that the employer did not even pay the PAYE to SARS. We successfully resolved the case by providing payslips reflecting the withholding of PAYE backed up by a bank statement showing the nett amount deposited in the bank account coupled with the employment contract indicating the gross salary as well as increase letters. Whilst SARS may not like granting a PAYE credit if they never received it (and understandably so), it is, unfortunately for SARS, not the employees’ problem.

Testimonials

Throughout our dealings with Unicus Tax, we have experienced an outstanding level of service. We have found the following: - Expert level of knowledge in the vast number of tax specialty areas affecting our tax affairs; - Immediate or exceptionally prompt response, to all questions and service requests; - A distinctive appreciation and consideration of the practical, business application / impact of advice provided; - Fair fees considering the levels of service provided and effort / time involved.

Confidential

Group Financial Officer

I would like to thank Nico and his team for the high level of expertise, competence and professionalism in dealing with our recent income tax review and ancillary matters. In addition to these highest levels of expertise and ability to assist us to practically apply the law, I have found the Unicus team to be very accommodating to our challenging time frames. They were always available and/or quick to respond to all of correspondence and questions. In short, excellent service! Thank you.

Michael Franas CA (S.A.)

Financial Director - The Doshi Group of Companies - South Africa

Nico's knowledge of Tax and dealing with SARS is second to none. I would strongly recommend him to anyone that needs assistance in this regard.

Charl Geyser

Managing Director: Africa - DR Gaming Technology™

Tax legislation has become extremely complicated in recent years, with today’s tax environment resembling a minefield. With SARS under huge pressure to collect revenue, the average SARS staff member (that one encounters in their call centres or at their help desks, when you are eventually able speak to someone) only able to resolve the most basic of matters, and SARS personnel themselves not always adhering to the tax legislation correctly, one needs professional assistance to negotiate this minefield. I have found Nico Theron of Unicus Tax Specialists to be very knowledgeable on tax matters; accurate, clear and concise; and so able to resolve matters promptly and effectively with SARS.

Confidential

Group Financial Officer

Unicus has given Natures Garden a professional service and delivered on our requests timeously and efficiently. They have a good practical knowledge of the SARS processes and gave excellent advise on how to handle our tax affairs.

Tobias van Blerk

Group Financial Officer - Natures Garden (Pty) Ltd

Your assistance has been incredibly patient, competent and efficient - it is appreciated! I have enjoyed this experience with Unicus and will continue to recommend you guys to other people seeking tax consultants Many thanks

Denver Dreyer

Chief Executive Officer , Worley Parsons RSA (PTY) Ltd

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We can help you

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