Are you a representative person? Use these six tips to avoid personal liability

Simangele Mzizi, Fsp Business, 28 Aug. 2014

Tags: tax, personal liabilty, how to avoid personal liability, representative person

If you’re an accountant, financial manager, director, bookkeeper, business owner or a tax practitioner, you’re a representative person.

This means, by law, you can be held personally liable for someone else’s tax debt.

That’s quite scary because not only could you be asked to settle another person’s debt, but it also means you could end up in jail for someone else’s mistake.

But it’s not all doom and gloom. There are ways to avoid personal liability.

Here are six tips you can use to avoid personal liability if you’re a representative person.

*********** Advertisement ************
Every South African tax law explained by our experts

The Practical Tax Loose Leaf Service offers you:
  • All the definitions and legal regulations, useful advice, exceptions to the rules that help you slip through the legislative jungle of taxes.
  • Case studies and practical examples that show you what elements you should consider for your taxes to be perfect.
  • Red flags you need to watch out for and the penalties you’ll face if you don’t respect them.
  • Sample templates at your disposal, ready to be filled in, customised and printed.
Click here for more details


Here’s how you can avoid personal liability if you’re a representative person

Tip #1: Make sure you have all the supporting documentation when you submit any returns. This’ll help you prove you calculated any taxes due with care and diligence.

Tip #2: Verify all information before you submit to SARS, do checks and balances and document them.

Tip #3: Confirm that directors and management take ultimate responsibility for any financial information they submit to you. In addition, make sure they understand what you submit and how you make calculations.

Tip #4: Get directors to sign power of attorney giving you permission to represent the entity or person at SARS;

Tip #5: Ensure your details as a representative person are always up to date at SARS if and when changes occur; and

Tip #6: Don’t put your name on the tax return as the representative person if you didn’t compile the information and don’t take 100% responsibility for the return. You can put the manager or directors name on the return, says the Practical Tax Loose Leaf Service.

There you have it. Being a representative person is no child’s play, there’s a lot of responsibility on your shoulders. So be sure to use these tips to avoid can avoid personal liability and always be honest with tax affairs.

Related articles:




RSS Facebook Share the experience
Accounting and Tax

  • Accounting
  • Allowances and deductions
  • Audit/Assessment
  • Capital gains tax
  • Dividends
  • Donations Tax
  • Exports and imports
  • Fringe benefits
  • Input tax
  • Provisional tax
  • Sars
  • Tax basics
  • Tax invoices
  • Tax returns
  • Vat basics
  • Vat registrations
  • Vat return
Premium Services
  • Company Registration
  • Objections
  • PAYE
  • Trusts
  • Turnover Tax
  • UIF
  • Wear and Tear
Our experts
KC Rottok
Mark Samowitz Natalie Cousens David Van Niekerk Dee Bezuidenhout Andre van Staden Vongai Mumbula
how to get my tax number online[read more]
Published on 16 Feb. 2018 1 answer
Need some help on correcting payslips taken over from outsourced payroll person. As soon as the company pays ANYTHING...[read more]
Published on 06 Feb. 2018 1 answer
Dear Sir, Please advise the CGT calculation in the following scenario: Close corporation with one member purchased...[read more]
Published on 18 Jan. 2018 1 answer
Video Archive Video club

Your library of Free eReports
View full library
SARS Tax Tables 2016/2017 Download

Simply click download for your FREE SARS Tax Tables 2016/2017 to ensure you calculate your tax correctly.