Johannesburg – Trevor Noah’s mother has found herself in the crosshairs of the SA Revenue Service (Sars) over unpaid taxes.
According to City Press, the Daily Show host’s mother Patricia Noah is allegedly R24 million in the red and Sars has reportedly issued a final letter of demand to the businesswoman in an attempt to recover the outstanding funds.
Patricia who runs the property business PN Noah Estates is in danger of having some of her assets attached and sold by Sars to offset the debt if she is unable to honour the payment within the period stipulated by Sars.
The letter in part reads: “According to the records of the South African Revenue Service, you have failed to pay your tax debt for one or more tax years and tax periods.”
“You may, within 10 business days from the date of this letter of demand, apply for any of the following remedies: payment instalments where you are unable to pay the full amount; suspension of the debt where you intend to submit or have submitted a formal dispute; compromise of a portion of the tax where this will provide a higher return to the fiscus than liquidation, sequestration or other collection measures,” City Press said.
Entrepreneurs are often faced with so many daily challenges that tax compliance is prioritised as much as it should be and the lack of resources often leads to business owners defaulting on their tax commitments as deadlines come and go.
Salaried employees have their tax deducted by their employers from their remunerations and paid over to Sars by their employers, thus fulfilling their tax obligations.
Those who are self-employed receive their income untaxed before it makes its way into their bank accounts, placing the onus on them to pay Sars.
Failing to honour tax commitments can lead to entrepreneurs finding themselves in the precarious position Patricia Noah finds herself in.
Quentin Daniel, head of finance at short-term business funding provider Lulalend, provides some tips on how SMEs can ensure they meet their tax obligations.
Keep your financial information up to date
According to Daniel, the first step to effectively managing your tax affairs is to ensure that your financial records are organised.
While the admin process may be laborious and time-consuming it will save you time when it is time to file your taxes. An added benefit of maintaining accurate records is that you will have a clear understanding of your business financial position.
Save on your tax bill with deductible expenses
Deductible expenses benefit your SME’s bottom line when it's time to file your tax returns.
“Deductible expenses generate income but not capital,” Daniel said .
Taking stock of your deductible expenses means you’ll never pay more tax than you need to.
Examples include:
– Buildings
– Salaries
– Stock
– Office equipment
– Travelling costs
– Entertainment costs
Take advantage of tax exemptions
Depending on your business, you may qualify for tax exemptions or rebates that reduce your tax obligation.
Examples include:
– Dividends income
– Government grants
Get professional help
Managing finances can get overwhelming for business owners when coupled with all the other responsibilities. There are people like tax practitioners who can make the process less stressful and prevent oversights.
“Getting advice from a professional tax consultant or accountant might be one of the best things you do for your business financial well-being. A professional can help you avoid costly tax mistakes and save you money in the long-term,” Daniel says.