Personal liability of directors and members for company taxes

As a business owner, do you understand what it means when you are appointed the Public Officer of your company, close corporation or trust or when you signed as the Representative Taxpayer on your EMP (PAYE) registration form? Most people don’t!

We have recently seen SARS delivering letters of “Notice of Personal Liability of Representative Taxpayer” issued in terms of the Tax Administration Act read together with the Income Tax Act. In our December 2015 BAN Bulletin newsletter, we reveal two situations recently experienced by clients that we hope will induce you, if you are unsure, to check with SARS who the representative taxpayers are in your business (and any past businesses you might have been involved in) and to caution those who are a registered representative taxpayer or public officer, be aware of what your responsibilities are.

Did you know there’s one thing you must do if you cease to be a representative person or withholding agent? You must notify SARS within 21 business days from the effective date, otherwise you could be held personally liable for the taxes of the company, CC, or trust.

But be careful! Just because you cease to be a representative person or a withholding agent it doesn’t relieve you of the liability you had while you were responsible.

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