With 2020 coming to a close, there are several important steps businesses must take to round off their financial years. Besides preparing one’s Annual Financial Statements (AFS), business owners must submit company tax returns to SARS if they wish to avoid several consequences as a result of failing to do so. This is one of the most critical parts of completing the business year and all business owners should prepare the necessary documentation to submit a successful company tax return. While an essential task, the process can be incredibly time-consuming and companies have begun seeking third-party assistance to ease this process while saving on costs.
MBS is a company that supports organisations by facilitating the submission of company tax returns, allowing business owners to focus their attention on other areas of the organisation as the year comes to an end. Such a service saves executives time and money while allowing them to allocate resources to important tasks still left outstanding before the financial year ends. Alas, why is it so important that companies prepare to submit company tax returns and why seek the guidance of a specialised third-party? In this article, we will outline the reasons you should complete your company’s tax returns every year before closing up shop.
From purchasing office equipment to sending through payroll, companies overpay in taxes on their expenses. This additional spend can be claimed back from SARS through the submission of company tax returns. Your business could draw a significant refund from a successful tax return, helping you prepare better for the year ahead. Provided that your tax return statements are all up to date, you should almost always walk away with an added bonus that you may allocate to areas of the business.
For small business owners, chances are you have and will require a loan to support certain areas of your company. Loans are a part of business that does not have to be as stressful as they seem provided that you have all the appropriate documentation and have been committing to proper business practices before applying for one. When seeking a loan agreement, you may need to showcase a Tax Clearance Certificate or other proof that you have been abiding by company tax laws. Without submitting company tax returns, you may not have the necessary documentation to secure a loan agreement with the bank.
One should always take the time to file company tax returns or seek professional assistance as the failure to do so could accrue severe penalties from SARS. If you miss a year on the tax calendar, despite having submitted your returns previously, you may be subject to fines or other consequences the next time you submit your company tax returns. This can negatively reflect on your business for future tax implications and lead to the tax administrators flagging your company as a must-watch for failure to comply.
Business owners that have a complete tax record ensure that their businesses are seen in a positive light in the eyes of SARS and other government organisations. This stands in the favour of one’s organisation and will highlight the trustworthiness and reliability of the company. Filing your company tax returns ensures that SARS has no reason to investigate your business for failure to comply and other offences which may have serious consequences. The completion of your company tax returns will look good for you, your business, and all of your employees.
Beyond the fear of being punished for failing to submit company tax returns, the feeling that you are contributing to your community should drive your compliance with these regulations. Business owners understand the value of community and should always strive to support one way or another. Doing so not only sheds great light on you but also showcases your company as one dedicated to its community – further establishing brand trust and loyalty among your share and stakeholders.
These are a few of the reasons all business owners should prepare and submit their company tax returns, a process that can be made easier with the assistance of businesses offering outsourced guidance, such as MBS.