Guarantees are pretty powerful – they’re used by leading manufacturers and retailers to gain our confidence and trust. We’ve all come across them at some point or another: “Life time guarantee”, “money back guarantee”, “product satisfaction guaranteed, or your money back”. They’re a promise. A promise that your purchase will provide you with a level of value, or a return on your investment. While a guarantee is common – expected, even – for certain products or services – one that should never be made is for a tax refund. And yet this happens. And every year unsuspecting taxpayers fall into the trap of unscrupulous people who claim they’ll guarantee you a tax refund if they do your tax return.
“But, what’s wrong with it?” you may be wondering. “Why can’t they make a promise like that?”
Simply – it’s just not true.
A tax refund isn’t a given. It only happens when a taxpayer has paid too much tax for the year. And the only way for that to happen is if your deductible expenses and tax credits reduce your tax liability below what you’ve already paid.
When is a Tax Refund Due?
Deductible expenses are certain costs that SARS allows specific taxpayers to claim against their tax. There are 2 important words in that sentence – certain and specific.
Certain costs: Not all costs can be claimed. For example, you can’t add up all your grocery bills for the year and try to claim it as a tax deductible expense. The types and portion of costs you’ll be able to claim will depend on your individual tax profile.
Specific taxpayers: Not all taxpayers may claim these expenses. You have to have a specific tax profile. Examples of these taxpayers include:
Landlords renting out property on a short, medium or long term basis
People who make donations to charities registered as a section 18A Public Benefit Organisation (SARS approved for tax purposes)
If the total of your permitted expenses decreases your tax liability to less than what you’ve already paid then - and only then – will a tax refund be issued for the amount overpaid.
As you can see above, there are limited circumstances and restrictions on what expenses (or partial costs) can be used to reduce the amount of tax one is liable to pay. Therefore, the only way someone can absolutely guarantee you a tax refund is if they’re fabricating expenses against false situations, allowances or benefits. In other words – they’re committing fraud. In your name!
SARS is crystal clear on this point.
Be Careful Who You Trust to File Your Taxes!
Irrespective of who files your tax return, you too are personally and ultimately responsible for your tax position with SARS. It is not a simple as just saying someone else did it for me. This means that when questions start being raised about irregularities in income and expenses, deductions and refunds, SARS can look to you. Yes, they’ll take the matter up with the person who completed your return too, but at the end of the day, you’ll also be accountable for any penalties or payments back to SARS that may occur.
Buddha is quoted as saying (amongst other things): “Three things cannot be long hidden: the sun, the moon and the truth.” And rest assured the truth will come out – perhaps not today, next month or even next year – but eventually, it will.
SARS have taken their task of routing out tax fraud seriously and have active monitoring of accounts to identify potential fraud. And they’re not only after the ‘big guys’. We’re seeing more and more reports of individuals being targeted for audits, tax reviews and possibly even ending up in court. For a couple of thousand Rand, it’s simply not worth it.
“But doesn’t TaxTim offer a guaranteed tax refund?”
No, we don’t.
What we do offer, however, is the promise of the maximum possible refund available to you – for your specific circumstances – if you’re due one. We’re able to make this guarantee because we don’t use false information to create a refund. Instead, we ask all the right questions to make sure you’ve claimed all deductions available to you, for your individual tax profile. In doing so, we’re able to guarantee that you’re paying the least amount of tax possible, while keeping you compliant with tax legislation and SARS guidelines.
In addition, we’re registered with SARS as a compliant, credible tax practitioner who can act on your behalf, and are the only consumer-facing website with direct integration with SARS.