However, where you are the client, bad advice or unprofessional conduct on their part can be detrimental to your financial or tax compliance status.
Because tax matters can become incredibly complex, taxpayers rely wholly on a consultant’s expertise and professional advice to guide them through the fog that surrounds taxation. It is a relationship built on trust, with the primary request being that they must ensure their clients remain compliant with the South African Revenue Service (“SARS”).
If one tax law is amended or your employment remuneration structure is adjusted in the slightest, it could have a knock-on effect on your tax affairs, which could lead to you no longer being tax compliant. In the same vein, the smallest technical component in a property sale or company merger can result in adverse tax exposure.
Taxpayers look to their accountants or tax professionals to make sure that financial changes or transactions are arranged with the most favourable outcomes. There is a tangible expectation for them to act on a client’s behalf and to have their best interests at heart. As such, tax and accounting practitioners are bound by a common law arrangement that obligates them to display a reasonable level of professional competence.
Sadly, this is not always the case. Taxpayers often fall victim to professional negligence, only to discover the consequences when it is too late. With SARS on the warpath, a consultant’s lackadaisical approach to their client’s tax affairs understates the seriousness of the matter.
What can be viewed as professional negligence?
The best measure to gauge professional negligence, is by discussing your concerns with a SARS representative or an established, reputable tax consulting firm who has a proven track record in pursuing tax compliance. If your relationship with SARS has been negatively influenced by the conduct of your accountant or tax practitioner, you are probably at the receiving end of professional negligence.
Typical examples of professional negligence:
What to do when you fall victim to professional negligence?
It is important to note that while being a client to the tax or accounting practitioner commissioned to tend to your taxes, you are also a South African taxpayer, which makes you a client to SARS. It is thereby implied that SARS is equally obligated to operate in a manner that has your best interests at heart.
According to the Tax Administration Act 28 of 2011:
“A senior SARS official may lodge a complaint with a ‘controlling body’ if a ‘registered tax practitioner’ or person who carries on a profession governed by the ‘controlling body’, did or omitted to do anything with respect to the affairs of a taxpayer, including that person’s affairs, that in the opinion of the official—
(a) was intended to assist the taxpayer to avoid or unduly postpone the performance of an obligation imposed on the taxpayer under a tax Act;
(b) by reason of negligence on the part of the person resulted in the avoidance or undue postponement of the performance of an obligation imposed on the taxpayer under a tax Act; or
(c) constitutes a contravention of a rule or code of conduct for the profession which may result in disciplinary action being taken against the ‘registered tax practitioner’ or person by the body.”
On their website, SARS further states that anyone can report a tax practitioner where unprofessional conduct is suspected. In that way, SARS is obligated to intervene on behalf of the taxpayer and to investigate the complaint. Professional negligence should, therefore, not be condoned, especially not if it puts your relationship with SARS at odds.
A consultancy with a strong legal component and experience in engaging SARS, can assist taxpayers with their tax obligations, while ensuring they remain compliant at all times.
SARS Eager To Employ Inexperienced Youth To Assist Confused Taxpayers