When preparing Provisional tax (IRP6) it’s easy to get overwhelmed by the sheer volume. You require feedback from your clients prior to submission, but with so many clients — and so many ways to obtain feedback — it’s hard to know where to start, and even harder to keep track of who has approved/declined your proposed submission.
Client approval on IRP6 submissions is crucial due to the various penalties imposed by SARS.
- The failure by a provisional taxpayer to make payment on time will result in a penalty, which is imposed in terms of paragraph 27 of the Fourth Schedule to the Income Tax Act, read with Chapter 15 of the Tax Administration Act. This penalty is calculated at 10% of the provisional tax amount not paid.
- A provisional taxpayer is at risk of a second type of penalty (Underestimation Penalty), imposed in terms of paragraph 20 of the Fourth Schedule to the Income Tax Act, read with Chapter 15 of the Tax Administration Act, where the taxpayer’s actual taxable income for the year of assessment in question is more than the estimate of taxable income declared by the taxpayer to SARS.
How does the TaxSmart workflow mitigate this risk?
By using TaxSmart you can obtain authorisation of a calculation via email by adding an approval link in your email text. This fantastic feature can help you keep track of authorisations by following a few easy steps.