Tax Tips and Problems faced by SME’s
Many SME’s attempt to do their own taxes and there is nothing wrong with it. The problem is that it takes a lot of time which could be spent more effectively and profitably on the business. It makes financial sense to use a tax service like Tax Relax to assist you.
Tax nightmares among owner-managed businesses and SME’s are time consuming and costly. Particularly when relating to tax queries and disputes with the South African Revenue Services (SARS).
By simply implementing key preventative administrative steps, business owners can actively avoid or at least reduce the risk of these tax mistakes from arising.
The accuracy of the underlying accounting information and supporting documentation is directly responsible for the integrity of a taxpayer’s income tax return. In the case of SMEs, this integrity is often queried; and is usually the result of a lean accounting function; and confusion in distinguishing between the financial affairs of the business and the business owner.
SARS tax auditors are focused first on testing the reliability of records and accounting books. As an example, they will Review cash accounting records for unusually large or ad hoc payments, on the basis that these often represent private expenses; which have been processed as business expenses and claimed for tax purposes.
The importance of accurate accounting information and supporting documentation is further compounded by tax regulations requiring taxpayers to maintain proof of all income and expenditure as well as maintaining business documentation in a particular format, for example, VAT invoices.
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