Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search Products
Filter by Categories
Company Secretarial
General Business
General Interest
Investing in Property
Personal Growth
Personal Wealth
Trusts and Estate Planning

Your company has never traded, and you didn’t submit any tax returns. Then, out of the blue, you received this letter from a debt collector appointed by SARS.

“Dear Taxpayer,

Kindly note your account INCOME_TAX reference no …………. 8151 is in arrears of R35 500,00. Kindly settle the full amounts immediately. Please log on e-Filing to initiate a payment arrangement. Revenue Consulting on behalf of SARS.  Contact us on 010 510 6932 or email

your proof of payment to

followed by all sorts of threatened action.

What does this mean to you?

I am not an attorney, and this article may be open to attack, but I can read the Tax Administration Act and this brief article is my conclusion.

If you want to read my detailed analysis, then please read my much longer article “Detailed analysis of SARS’ debt collector threats”.

My reading of the Act brings me to these conclusions:

  • Companies Act: As a Director of the company, you cannot be held personally liable for the company’s tax (or any other) debts unless the company traded recklessly. It did not trade.
  • As the Public Officer of the company, you are responsible for the submission of its tax returns and failure to do so is a criminal offence. I don’t believe that this failure has ever been prosecuted, but if it bothers you, why not submit the Nil returns now? It is not a criminal offence to submit late returns.
  • As the Public Officer of the company, you may be subject to penalties for the company’s defaults. These are not the penalties that have already been imposed on the company. They would be separate penalties. I have never yet come across an instance where they have been imposed.
  • As the Representative Taxpayer of the company, you are responsible for ensuring that the company pays its tax liabilities.
  • The Representative Taxpayer can be held personally liable for the company’s unpaid taxes if (s)he diverted company money when it could have been used to pay those taxes. The company never had any money with which to pay the penalties, so you cannot be held personally liable.

So, what is that letter? A bullying scare tactic aimed at frightening you into personally paying penalties for which you are not liable.


XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Looking for even more informative content? Check out the books I have written which have proved to be very popular.

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also view see our full list of services.

Do you want to leave your cart?

Your cart is awaiting your next purchase, so please proceed to the Home page and continue shopping. If you are leaving your cart because of problems, why not give us a call on our 24 hr numbers 063 866 8928 or 011 805 0030 (subject to load shedding)? If all else fails, call Derek, our CEO on 082 552 9696. We’ll do what we can to help