What happens if the company I worked for didn't declare/pay over PAYE deducted from my salary when I was working for them and now they are in the process of liquidating? Who is liable to SARS for this money? How will it affect my tax return?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
From the information provided it appears that the employer also did not submit the employer reconciliation. You indicated that the employee’s tax was actually withheld (deducted from the amounts paid to the individual), but that the amount withheld was not paid to SARS. We submit that the employer is liable to pay the amount – as withholding agent. See section 157(1) of the Tax Administration Act: “A withholding agent is personally liable for an amount of tax withheld and not paid to SARS …” In addition, the employer may be guilty of an offence – see section 234(p) of the Act - irrelevant to your client.