SARS Business Situation

[Straga]

Hi, everyone

I'm in a bit of a situation here and hopefully, someone who has had a similar experience can give me some much-needed guidance on how best to proceed.

First, some background;

I recently started a new business, but didn't register a new business on CIPC, but instead used an existing business I had which closed just before the lockdown in 2020 and just changed the name, address, etc. I registered this business through a 3rd party company back then - this will become important later on.

The business was obviously dormant for all this time since I closed it until I repurposed it recently, and I had not submitted either SARS tax returns or CIPC returns for the time it was dormant. Now, for the new business venture, I need a tax clearance certificate, which I can only get once I submit the necessary tax returns. Submitting these and getting the certificate through the 3rd party company will cost me in excess of R1000.

So, I decided against that and decided that I will do it myself instead. I proceeded to register myself as a registered representative on eFiling for my company and am now waiting for SARS to approve my request. After that, I can submit my returns, change the details on the eFiling website so that I will be able to receive my certificate, and then request my certificate.

Now, my question;

All of this feels hugely unnecessary and not to mention time-consuming, and I'm considering just leaving this company to remain dormant for now and registering a new company instead, is there any reason why this wouldn't be the better/easier route to go? I will be using the CIPC website and doing it myself this time, so I don't have to go through a 3rd party again.

Furthermore, what will happen to a company if I just leave it dormant without closing it down manually? Especially with regards to SARS? I am pretty sure that CIPC deregisters it after a certain amount of time, but I'm afraid that the SARS returns just continue to add up and one day they come knocking. Is that the case, and if so would I need to settle the outstanding returns before letting SARS somehow know that the company is closed?

Thank you for any assistance and guidance in advance, and please do excuse any dumb questions - the whole SARS and eFiling thing is still hugely confusing to me.

 

[EELeat]

excess of R1000

This really doesn't seem like a lot of money, but hey, guess that's why I'm not a successful business owner.

But seriously. It does seem like a fairly decent price for someone else to do the heavy lifting for you.
Imagine as well it does save you from SARS coming knocking later in the case you did nothing about the dormant records...

 

[M@tree2]

Agreed with @EELeat , but the thing is that SARS charges an increasing penalty...
So that excess of R1000 can be anything over that, if I understand correctly, again I'm not an accountant or CA... IMO I'd pay someone that knows what they are doing to get compliant, I'd rather not be on the wrong side of this one.

SARS Penalties maybe give this a read, reputable source...

EDIT: If you plan to leave a company for dead, declare it as such, otherwise you will accrue penalties.

 

[ThatGuyJD]

Hi, everyone

I'm in a bit of a situation here and hopefully, someone who has had a similar experience can give me some much-needed guidance on how best to proceed.

First, some background;

I recently started a new business, but didn't register a new business on CIPC, but instead used an existing business I had which closed just before the lockdown in 2020 and just changed the name, address, etc. I registered this business through a 3rd party company back then - this will become important later on.

The business was obviously dormant for all this time since I closed it until I repurposed it recently, and I had not submitted either SARS tax returns or CIPC returns for the time it was dormant. Now, for the new business venture, I need a tax clearance certificate, which I can only get once I submit the necessary tax returns. Submitting these and getting the certificate through the 3rd party company will cost me in excess of R1000.

So, I decided against that and decided that I will do it myself instead. I proceeded to register myself as a registered representative on eFiling for my company and am now waiting for SARS to approve my request. After that, I can submit my returns, change the details on the eFiling website so that I will be able to receive my certificate, and then request my certificate.

Now, my question;

All of this feels hugely unnecessary and not to mention time-consuming, and I'm considering just leaving this company to remain dormant for now and registering a new company instead, is there any reason why this wouldn't be the better/easier route to go? I will be using the CIPC website and doing it myself this time, so I don't have to go through a 3rd party again.

Furthermore, what will happen to a company if I just leave it dormant without closing it down manually? Especially with regards to SARS? I am pretty sure that CIPC deregisters it after a certain amount of time, but I'm afraid that the SARS returns just continue to add up and one day they come knocking. Is that the case, and if so would I need to settle the outstanding returns before letting SARS somehow know that the company is closed?

Thank you for any assistance and guidance in advance, and please do excuse any dumb questions - the whole SARS and eFiling thing is still hugely confusing to me.

So you need to catch up on any outstanding declarations, CIPC side and then declare dormant if you want to start new so at that point it is just as much as starting over. If they declare it dormant as no reports submitted then you can't register as a director in future as there are also penalties and fees outstanding from their side and not just SARS.

 

[Straga]

Hi, everyone

Thank you guys very much for your input.

I've decided to take your advice and bite the bullet to get everything sorted through the 3rd party company. I can always restructure things later down the line if I really want to.