I have a client with Queries could not fully answer. She was declared Insolvent some years ago. She was “self-employed” for some years and has not submitted returns. She has now been formally employed and the employer requires a Tax Number. a. The Tax Num
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
Happy to answer and not provide guidance.
The principle is that the client’s status as a taxpayer changed when the sequestration order became final. She then ceased to be a taxpayer and a new tax registration number will then have to be obtain when she earned taxable income (above the tax threshold) thereafter. This doesn’t depend on whether or not she was rehabilitated. The point is that no returns were required, in respect of her tax registration number after the date of the sequestration.
In essence, if she didn’t register previously, she will have to register now – the employer can also do that.
We accept that the reference to “will SARS take the funds” is made because she had a tax debt at the time of sequestration. In that respect SARS had to prove a claim against the insolvent estate and if it was not paid in full, had to write of the balance. They can’t now, as insolvent or rehabilitated person, recover the amount from her. If our assumption is not correct the guidance may not be appropriate – please advise, but provide more detail then.