While the introduction of E-filing by the South African Revenue Service (SARS) has slightly eased the burden of taxpayers from making mistakes on their annual tax returns, just one error in entering information on your forms could still end up costing you – in the form of a larger tax bill or a smaller refund. Even if a mistake, whether on your computer or paper forms, doesn’t cost you cash, it could delay your refund.
Renier Nell, Master Tax Practitioner and Director of Innovative Accounting Solutions, advises that to avoid such pitfalls, to save money, and stay to abreast of the ever-changing tax regulatory environments, individuals should consider using a qualified tax practitioner to file their annual tax return. However, he also cautions to not merely appoint the first tax consultant you meet who says he knows how to file a tax return – as it might end up costing you a lot more than just his fee.
He offers three steps that every taxpayer should follow when contracting a tax professional before making a final decision of whom to use:
The best way to find a good accountant is to get a referral from your financial adviser, your banker or a business colleague, as they will have a good understanding of your overall needs as well as who is trustworthy and best suited to fulfill them.
The next step is to interview your referrals. For each, plan on two meetings before making your decision. One meeting should be at your working space, while the other should be at theirs. During the interviews, your principal goal is to find out about three things: services, personality and fees.
Once you have met with your three options, insist on contacting their references to get a sense of whether they are the right fit for you and your tax needs.
Is the person/s registered as a tax practitioner?
This is a non-negotiable! Firms and individuals who get paid to file tax returns on behalf of others or give tax advice have to be registered with SARS as a tax practitioner. Further, they must also be registered with an approved industry body such as the South African Institute of Tax Practitioners (SAIT) or the South African Institute of Business Accountants (SAIBA).
These bodies are there to make sure that all their members are up to date with their personal taxes, that they don’t have criminal records and that they have the necessary qualifications and skills to file other people’s taxes accurately.
Ask the prospective accountant/tax professional for their SARS practitioner number as well as a membership number with their industry body of choice. Use this to contact SARS as well as the relevant body to confirm their membership in good standing.
What are the fees involved?
Most professionals base their fees on the complexity of your tax return and the time it takes to prepare and file it.
To make sure you’re paying the right amount, remember to get at least three quotes before making a decision. However, the cheapest quote is not always the most cost effective in the end, nor does the most expensive quote equate to the most efficient service. Bite your time and weigh your options closely.
A big red light to watch out for is if the prospective tax practitioner calculates their fee on a percentage of the tax refund that they can get you – although not illegal, this practice is considered highly unethical.
Ultimately, the pros of engaging a tax practitioner to do your tax returns far outweigh the cons. So, if you’re worried about paying more tax in the upcoming tax return season, see a tax professional and you may pay considerably less and save yourself a headache or two as well as some much-needed time to rest.