What is meant by Accountants Taxation Services

by | Dec 14, 2020 | Accounting Firm Services

Everyone wants to pay less tax. No one can dispute that. It’s an achievable goal for many, but there are two ways to do it, and only one of those ways has a guaranteed good outcome. (Hint: it’s also the only ethical way to do it!).

You might be surprised at how much opportunity there is to, if not avoid paying tax altogether on certain investments, to avoid paying more than you need to pay, or should pay SARS. TAT tax consulting services offer ethical and complaint tax solutions that will maximise opportunities and minimise tax risk.

Tax Solutions

Professional tax consulting services offer many-tiered, and often related, tax solutions – from basic tax advice (personal and business-related- especially payroll) to tax assessments (personal, business, or both, and including trust tax assessments); from high-level tax structuring of wealth portfolios to corporate tax structuring.

All tax solutions are aimed at one thing: minimising tax payments legitimately and legally. An essential tenet of these services is ensuring that businesses remain tax compliant at all times and avoid tax penalties. The latter can hit an individual hard and can run into millions or Rands for larger businesses – hitting the shareholders and employees just as hard – if not harder. Compliance is especially important due to frequent changes in tax legislation that puts businesses and individuals at risk of falling afoul of tax laws.

These opportunities are all characterised by being legitimate, legal, compliant and ethical. However, some of these opportunities also not always ‘common knowledge’ in the public sphere, and many methods used to reduce taxation on asset portfolios (particularly when it comes to tax structuring) are complex.

The tax solutions offered by professional tax consultants put you and/or your business in the optimal position to take advantage of tax loopholes (the legal ones – to be taken advantage within the limits of the law), rebates, exemptions, deductions and especially tax incentives.

These solutions are all offered, tailored to your business or individual needs, individually, or as part of the process of tax planning.

Tax Planning

Both Business Tax Planning & Personal Tax Planning focus on minimising the taxes that you have to pay – i.e. minimising tax liabilities. This is done through being prepared take advantage of tax breaks, exemptions and legal loopholes – well in advance of these opportunities presenting themselves – while ensuring that your business, and you, remain complaint on your tax affairs. The keyword in both business and personal tax planning is: strategy!

Business Tax Planning

Corporate tax planning focuses on minimising tax liabilities to increase cashflow. Hence business tax planning involves strategies to minimise tax payments legally, as well as maintaining basic tax compliance and preparing for any changes (expected and unexpected) arising from shifts in tax legislation.

Business Tax liabilities: These include tax payments (made frequently throughout the year and including provisional tax payments) and tax penalties arising from non-compliance.

Business Tax compliance: In addition to the non-compliance risks that arise from changes in legislation, planning for compliance means maintaining basic and essential tax compliance. This means meeting all legal obligations related to the completion and submission of company tax returns.

Basic business tax compliance involves:

  • review of income tax assessments
  • review of statements of account
  • maintenance of full tax records on an ongoing basis
  • lodging timely objections and appeals with SARS in the case of a disputed tax assessment
  • conducting accrual reviews to ensure ‘fair presentation of the taxation section’ of your company’s annual financial statements

Tax planning as a strategic business goal:

Minimising tax payments should be a goal from the start. It should be an integral part of the financial strategy in your Business Plan.

Business tax planning will inform operational and financial strategies. But how do you plan for the unknown (tax breaks, tax increases and changes in legislation)? The most essential part of your business tax strategy should be budgeting for tax consultancy. You can get on with running your business while your tax consultants ensure that you are compliant at all time and ready to capitalise on tax opportunities as they come up.

However, it’s never too late to start. Business tax consultants can help you devise a tax plan at any time, starting with reviews of your current tax situation to assist you in setting strategies for minimising tax and staying complaint for your business’s growth and future. 

Personal Tax Planning

While business tax planning is aimed at a healthy cashflow and business growth, personal tax planning is aimed at protecting and personal financial health and increasing wealth.

Personal tax planning focuses on the tax consequences of investments, financial transactions and other financial decisions and actions.

There are fewer tax compliance regulations to stay on top of when it comes to basic personal tax planning. However, when investment portfolios grow and diversify, and especially extend to offshore investments, tax risks and regulations become more and more convoluted. Having a solid tax plan from the start is the best foundation on which to build ongoing, evolving tax planning, as required.

An essential part of the tax planning process is the tax structure assessment. These assessments are need on a regular basis for business tax structuring, especially as businesses grow and restructure operationally. However, ongoing tax structure assessments are essential for personal wealth portfolio structuring and wealth protection.

Tax Structure Assessment

Tax Structure Assessments:

If you are growing your wealth and wish to do so in a way that minimises the taxes you have to pay now, in the medium term and in the future, you should start with a tax structure assessment.

Your tax structure assessment involves taking stock of all your current assets. If you have assets held in trust, these will also be taken into account. From there, your tax consultant will evaluate what you can do to cut the amount of tax you are paying – assessing what you will pay as things stand, and how to pay less, in the short, medium and long term.

Tax assessments should be done regularly. Your asset portfolio will change, and the value of the same assets will also change. So too will tax regulations and requirements for tax compliance. That’s a given. Put those three factors together, and it is easy to understand the value of annual tax assessments. So, If you make such assessments part of your ongoing tax planning – so much the better.

The more wealth you have, the greater the value tax consulting for tax structure assessments and tax planning. The more you grow your wealth for your family’s future, the more ongoing estate taxation advice and tax planning becomes a high-dividend investment in itself.

Tax consulting – right from the initial tax structure assessments stage (or at one-off tax assessment) will help you plan and structure your asset portfolio to:

  • Get better returns on investments – and pay less tax on them.
  • Capitilise on investments offering tax benefits and even tax exemptions
  • Maintain tax compliance and avoid pitfalls – all while making a complex web of taxation implications simple!

Ongoing, contracted, tax assessment and structuring adds another huge benefit: your tax consultant will be aware impending changes in legislation that will affect you, often before you are. They will be able to advise on moving your money in time to avoid a tax increase on a particular investment or capital gains, before you get caught out. They will also be ready to help you take advantage of the release of tax-exempt investments and savings products, or investments and other initiatives offering tax breaks. Again (because the importance of this cannot be stressed enough) while maintaining full tax compliance.

Offshore Tax Structure Assessment

Offshore Tax Structure Assessments:

All prior tax planning and structuring needs urgent review in the case of offshore investments – thanks to the amendments to the Income Tax Act in the Taxation Laws Amendment Bill of 2017.

Due to recent changes in tax legislation regarding offshore income, if your investment or business portfolio extends offshore, you would be well advised to contract an offshore tax structure assessment. To not do so may expose your portfolio or business to extensive tax liabilities.

Wills and Trusts

Wills and Trusts:

The tax assessment, planning and tax structuring associated with wills and trusts has been in a state of flux due to legislative changes. The tax structuring of personal and family wealth portfolios for estate planning had to adapt considerably to 2016 tax law amendments. Tax ‘loopholes’ closed, especially those associated with Trusts. Current changes to tax laws on offshore investments has lately resulted in another shake up.

When it comes to taxation, the only certainty we can count on is that nothing is certain. The best way to be prepared to avoid nasty tax shocks and be in a position to protect one’s legacy from undue, or unnecessary, taxation, is have personal wealth tax structuring, up to date with current legislation. It is crucial that wills and trusts are in place and set up correctly to minimise tax liabilities for you and your inheritors.

There are still ways to minimise estate duty, defer donations tax and if not avoid certain tax payments, reduce them or distribute them in a less damaging way. If your will and/or trust has been in place for a while, unamended, it’s recommended that you invest in a careful assessment or review of your current tax structure and professional tax consulting to bring it into line with current local and national tax legislation realities- and keep it there. Your family will thank you for it. 

Tax Advice

Tax Advice

The concept of tax advice can be broadly applied, but the most commonly sought is advice on Company PAYE Tax Advice (incl. Payroll Structure Tax Consulting).

PAYE (pay as you go income tax) must be deducted from employee’s salaries at each pay period. The PAYE scaling is subject to SARS revision each financial year. PAYE seems simple enough (provided you are up to date with the current PAYE tax scaling), until you factor in the following payroll considerations:

  • Overtime
  • ‘Casual’ employment / Temp employees / ‘Contract’ workers
  • Leave: paid, unpaid and special leave
    Pensions and other contributions
  • UIF (for SA Nationals only)
  • Other forms of remuneration, such as shares, incentives and bonuses.

While the above are regulated by labour laws, statutory compliance comes under scrutiny with incorrect PAYE deductions. Businesses that do not meet payroll compliance and submit compliant PAYE income tax payments on behalf of their employees, can face heavy penalties. Tax advice from professional tax consultants can set you on the right path from the start, with regular review ensuring compliance with SARS regulations and related statutes.

This will ensure that your employees PAYE deductions are fair. It will also help you structure your remuneration packages and terms of employment to minimise PAYE deductions legally. This will assist you in finding the best and most tax savvy ways to compensate your employees – and help you attract and retain capacity in the most cost-effective way for your company.

Tax Legal Assistance

Tax Legal Assistance:

Tax disputes & other tax woes: Tax Consultants can to help you ‘fight’ SARS when you need to and sort out any tax problems you may be facing – within the required time frames.

If getting your tax return in on time is a headache, SARS disputing your assessment is ten times worse. It’s fine if you are set to get back more from SARS than you thought – that still indicates errors in your methods of calculating your tax. Not so great is getting back a SARS tax assessment that indicates you owe even more tax than you thought. That is when you call the ‘Taxbusters’!

Professional tax consulting services are never in more demand, and never have as much of an immediate impact on your financial and state of mind as they are when a client is faced with fighting SARS, faced with significant penalties if you do not pay up or resolve a dispute in time.

When you are facing SARS head on, it helps to have:

  • Your accounting exact, correct and compliant…and then, when you know you are right, and SARS is wrong…
  • Help in knowing your ‘tax rights’
  • Practical and knowledgeable assistance in objecting to the SARS tax assessment
  • Lodging an appeal in the event that SARS does not allow your objection, and then, if necessary…
  • Pushing the appeal through the Alternative Dispute Resolution (ADR) process, a hearing by the Tax Board and/or a hearing by the Tax Court.

If any part of this does not sound like fun, it’s because it isn’t. But it can be painless, and you can sleep at night through the whole process, knowing that the dispute, and your tax affairs, are professionally managed by a team that can do it better. A lot better!

The tax landscape is broad and constantly shifting. However tax savvy you are, you can always be ‘tax savvier’ – and you’ll be ‘tax savviest’ with professional taxation services and support.

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