Mitigating SARS Audit Risks: Introducing Tax Risk Insurance for Individuals, Trusts, and Small- to Medium-Sized Businesses

In a recent article, Moneyweb reports that KEN?— a destination management company in the tourism industry, appealed to the court against additional VAT assessments raised by the South African Revenue Service (SARS) against the company. KEN?objected to the assessments, but SARS unfairly disallowed the objection. KEN?then appealed to the tax court. The court found that the approach adopted by SARS in issuing the additional assessments was inconsistent with the approach it adopted in 2005, its own criteria set out in its own interpretation note, and the evidence in the case. The Cape Town Tax Court granted a punitive cost order against SARS.

This?is an?example of why clients can benefit from tax risk insurance. Read the full article here.

Introducing Tax Risk Insurance

In the intricate world of tax compliance, the risk of a SARS (South African Revenue Service) audit is a genuine concern for small- to medium-sized companies, individual business owners, trusts, and high-net-worth individuals. Recognizing this, Southern Cross Risk Management has joined forces with Tax Risk Underwriting Managers (underwritten by Bryte Insurance Company Ltd) to offer our clients a comprehensive Tax Risk Insurance product, specifically designed to address the unique needs of these entities and individuals.

The Reality of SARS Audits and the Importance of Protection

The prospect of a SARS audit looms large for businesses and individuals alike. Recent legislative changes, notably the Tax Administration Act, underscore the critical need for proactive management of business compliance risks. While effective internal controls, good corporate governance, and qualified advisers contribute to risk mitigation, Tax Risk Insurance emerges as a powerful and necessary protective measure.

How Tax Risk Insurance Works: Your Shield Against SARS Audits

Should you be selected for a SARS tax audit or face a related dispute, our partnership with Tax Risk Underwriting Managers ensures you have a robust defense in place. The key features of our Tax Risk Insurance include:

1. Legal Defense and Accounting Cover: Our product provides coverage for legal defense and accounting services, allowing you to engage top professionals to act on your behalf during a SARS audit.
2. Comprehensive Professional Team: In the event of an audit, Tax Risk Underwriting Managers will appoint and fund a team of experts, including accountants, auditors, tax attorneys, tax specialists, and tax advisors. This comprehensive approach ensures a fair outcome for the taxpayer.

Benefits of Tax Risk Insurance: Protecting Your Financial Interests

1. Affordable Premiums: Our Tax Risk Insurance offers affordable premiums, making robust protection accessible for small- to medium-sized companies and individuals.
2. Retrospective Coverage: There's no waiting period with our policy. Once active, you are protected, regardless of how far back SARS assesses your records.
3. Coverage of Your Accountant's Fees: During a claim, your own accountant's fees for services are covered, relieving you of additional financial burdens.

Activate Your Tax Risk Insurance Today

Don't leave the fate of your business or personal financial standing to chance. Contact our dedicated team today to activate your Tax Risk Insurance protection. By taking this proactive step, you are ensuring that you have a formidable defense against the uncertainties of SARS audits.

Secure your financial well-being with Southern Cross Risk Management and Tax Risk Underwriting Managers. Let us be your partner in safeguarding your business or personal assets.

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John Austen Lars Forssman Nicole Kern Anjili Valla Nomsa Mathega Busisiwe Khorommbi Natasha Moodley (Nundlall) Kathryn Bourquin Jessica Grobbelaar Mia Steenkamp