What does the SME need to know before selecting a tax practitioner?
Faith Ngwenya, Technical Executive at the South African Institute of Professional Accountants
Hiring a tax practitioner is not a luxury for the small firm, it is an essential investment, but there are some boxes that the business and the individual taxpayer must check before they sign on the dotted line.
Assess professional affiliations
The first step in hiring a tax practitioner is to ensure that they are registered with a professional body. Check to see that the person is registered with a professional body and that it is aligned to, and recognised by, SARS. You need to know that any person assisting you with a tax related matter is part of an institution that SARS has vetted and approved.
Determine client lists
Reputation and affiliation are essential boxes to check, but the third is no less vital – clients. Find out if the practitioner has clients that earn within the same arena as your business and how long they have been in practice.
You need reassurance that this person knows what they are doing and, if you have a high net worth, you need tax support that can help you to grow your wealth. Establish how long they have been a practitioner for and their client list. While you cannot work exclusively in years, a three year limit is ideal and also this way you can be assured that their client list matches the value proposition of your own business.
Ensure that the first thing the tax practitioner does is provide you with a detailed engagement letter that spells out the responsibilities, timelines and deliverables of both parties. The letter needs to be clear and very specific, detailing the times and dates for the business to submit paperwork and a commitment from the practitioner to file on time. Concise and precise information and deliverables are essential for a good engagement letter from a reliable practitioner.
Look at the history
Tap into the history of the tax practitioner and make sure that their clients are not all being audited by SARS. A client or two under audit is not necessarily a concern, but if every other client is being audited it may be that SARS is picking up suspect or high risk activity and that could be due to poor practitioner performance.
Know the costs
Everybody wants a bargain, but if your tax practitioner is offering to handle your taxes for a measly sum, then it could be a sign that they are cutting corners. Never agree on a contingency fees – where the practitioner will take a percentage of the “refund” you get from SARS this is illegal. Never go with the first person you meet – do your research and compare prices and see which one of the practitioners you’ve spoken to comes out on top. All of these tests should be applied to any tax practitioner you are considering introduction to your business.