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Shaie Zindel
Shaie Zindel, Attorney
Category: South Africa Law
Satisfied Customers: 1185
Experience:  All areas of commercial and contract Law - specialist in property advice.
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Can someone please help me. Due to many circumstances we

Customer Question

Can someone please help me.

Due to many circumstances we were unable to submit our tax returns from 2007-2011.
These are the circumstances
1 - With the credit crunch we lost major clients & many folded.
2 - The director of the company got seriously sick during that time (stress related)
3 - During 2009 the computer (without back-ups) crashed with ALL the previous tax returns submitted.
4 - I was appointed in 2010 to be the manager
5 - Debit orders could not be afforded every month so when double figures were extracted from the bank account - it basically left the company with nothing.

We are a very small company & our book-keepers insist we make a profit of about R150000/annum (I don't agree). Our brute income is less than 1.3 million.

In 2011 we got a demand from SARS for the returns & I started submitting.
In the end with all the levies & interest it came to an amount of R1 053 808.65.
Our book-keepers met with SARS (& are still busy) with a settlement agreement.

Today I got a letter from SARS instructing me to pay the full amount in 10 days - this is impossible to do. Really impossible.

I have a cc under my own name - I can move the company & all client to the new cc & then it should be business as usual - even though business is very tough we managed to pay every cent since late 2011 to SARS - PAYE, VAT, etc.

What can we do?? Liquidate the business?? Am I iin any kind of trouble here?

Please help - I am desperate.
Submitted: 10 months ago.
Category: South Africa Law
Expert:  Shaie Zindel replied 10 months ago.
Hi There - as long as you are not a Director you shouldn't have any personal problems. What I would do is speak to the owner and get a lawyer involved to help you draw a sale of business agreement. Sell the business for R1 or another nominal amount but you must EXCLUDE all liabilities. You will advertise the transfer and assure clients and suppliers its business as usual just a corporate restructure. The liquidate the old Company and sit quietly. Make sure in the new company you run things properly. Of course there is a possibility that SARS could try make an issue out of it but for this kind of money they will probably (hopefully) just close their file and move on. That's my suggestion. I hope this helps and wish you luck. Please remember to rate my service so far. Regards
Shaie Zindel, Attorney
Category: South Africa Law
Satisfied Customers: 1185
Experience: All areas of commercial and contract Law - specialist in property advice.
Shaie Zindel and other South Africa Law Specialists are ready to help you
Customer: replied 10 months ago.

Thank so much - I feel a little better.


 


If SARS decides not to move on - what will happen to the directors (ie my parents)??


 


Even if the sale is finalised...

Expert:  Shaie Zindel replied 10 months ago.

Honestly speaking - they cant do much to your folks. As long as VAT and PAYE are fully paid for the rest there isn't really personal liability unless they go through a massive process under the Companies Act of 2008 and prove that the Directors (or another person) acted fraudulently or recklessly. I really wouldn't be too concerned and at the end of it all if they do decide to take it further you just negotiate a deal then. SARS couldn't bugger XXXXX XXXXX over a few billion rand - I promise you they probably aren't interested in your parents and their million rand story.

Customer: replied 10 months ago.

You say that 'As long as VAT and PAYE are fully paid'

The amount outstanding is VAT, PAYE & ITA.... so there are big problems??

Expert:  Shaie Zindel replied 10 months ago.
BUT in your main question above you said: even though business is very tough we managed to pay every cent since late 2011 to SARS - PAYE, VAT, etc.??? Its not a huge problem but VAT and PAYE must be paid as the Directors can be held personally liable for those amounts!
Customer: replied 10 months ago.

Oh dear, sorry I meant we have only been able to pay that since 2011-now - so 2007-2011 is outstanding... so we are in big trouble?

Expert:  Shaie Zindel replied 10 months ago.

Hmmm - this is a potential problem! You need to get an attorney on board to help you through the process. They will more than likely claim VAT and PAYE from the Directors. This is treated differently to non payment of income tax because with VAT and PAYE you are not the owner of the funds you deduct it from customers and employees and you are supposed to pay it over. Not paying it over is seen as a form of theft. My advice is get a good attorney on board now to help you negotiate with SARS.

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