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Don’t try to do it on your own, create a tax team - The 7 Habitual Tax Mistake Solution 2

01 July 2007   (0 Comments)
Posted by: Author: Terry Scott
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Don’t try to do it on your own, create a tax team - Habitual Tax Mistake Solution 2
 
We, in the legal profession, are no doubt familiar with the old adage: "He who represents himself, has a fool for a client.” This is clearly an accurate statement based on real and hard experience to which all lawyers subscribe.
 
Similarly, there is the danger when sickness and disease hit our bodies we tend to become self-diagnosticians. We either think the worst and worry ourselves to distraction or inaction or worry ourselves sick (more sick!). Alternatively we try and ignore the symptoms in the expectation that they will eventually go away. When they don’t, only then do we drag ourselves off to the expert – the doctor or specialist - and get an expert diagnosis of the problem so that we can get treated and secure the necessary relief.

In simple terms, we become very subjective in our outlook and all sense of reasonability and objectivity fall off the radar screen. We end up encountering more problems, difficulties or setbacks that could so easily have been avoided had we simply taken the necessary expert advice at the very beginning when the problems or symptoms first arose or appeared.  Another old adage springs to mind: "Prevention is better than cure.
 
Do we not often make the same mistakes when we approach our tax affairs, be it in business or even on a personal level? So often we try to handle our own tax affairs and clearly lack the necessary skills and/or expertise to handle them properly or adequately.When tax problems arise, do we ignore them in the hope that they will go away or not be detected or do we panic to such a degree that we are paralysed to inaction and hope that the Sword of Damocles in the hands of SARS will not fall on us?
 
Tax, to say the least, is a vast and very complex subject to which we are all subservient once we enter the arena of business or start earning an income.The greater the earnings we derive from our employment or the greater the profits we make in business, the greater the desire and challenge to minimise our tax exposure and improve our bottom line or our take-home pay.We then take advice from non-experts or take chances where we believe there are opportunities to reduce our tax exposure.Often we realise too late that the opportunities do not sustain the scrutiny of SARS or meet with their approval. We face the risk of the punitive measures SARS can implement such as penalties (200%) and interest which are not only unpalatable but can result in us finding ourselves in not only serious financial trouble, but also facing the risk of criminal prosecution.

Not only is tax a complex subject and the subject of much complicated legislative enactments,  but it is also the subject of vast case law and expert publications, be it in book or article form. A subject often so complex and involved the average business person or lay person simply does not have the time, understanding or ability to comprehend all that is set out in the vast literature to actually deal with the tax problems that can beset them, be it PAYE, SITE, VAT or capital gains tax to name but a few.In essence, an expert or the establishment of or access to a team of experts in this area is so often a much-needed resource to effectively and promptly handle tax matters on both a business and personal level. 

Very often people are reluctant or reticent to approach such experts because of the perceived cost involved.  Another old adage springs to mind – we become "penny wise and pound foolish”.We would rather not spend the money up front and run the risk of paying a greater price later.Not a wise course; at times the cost of the right advice, not only helps reduce the greater risk of penalties and interest, but gives one that peace of mind. 

What price tag can you attach to that?So what is the best advice or counsel to take in this regard? When you have a problem or face a potential problem, be it in the arena of tax, or be it any other arena for that matter, go to the expert who can fix it or at least advise you on the best course of action or even assist you in finding a solution.Better still, try and avoid the problem in the first place by applying the "prevention is better than cure” principle. Get the right advice from the experts up front and so avoid problems completely (hopefully) down the line.

There are experts out there – use them.It is far wiser and more prudent than trying to do it on your own. If you are in business you can retain such experts or consultants on your team and use them effectively as and when the need arises.
 
Alternatively, if you are able to, create your own tax team, but still have access to the necessary external experts so that you have an outside objective viewpoint.Don’t run the risk of being subject to a potentially subjective and even emotive viewpoint, because your own tax team is intimately in the cut and thrust of the problems and internal politics that go hand in hand with them.Sometimes, an outsider is quicker to see a problem with a fresh pair of eyes than the person who is caught up in the issues and is factory blind or cannot see the wood for the trees. Yes, another old adage but no less relevant.

Nothing of significance was ever achieved by an individual acting alone. A Chinese proverb states, "Behind an able man there are always other able men.”  A team working together is always at the heart 
of great achievement.You cannot do anything of real value alone.President Lyndon B Johnson, a former president of the United States of America, said: "There are no problems we cannot solve together and very few that we solve by ourselves.”  Teams involving more people afford more resources, ideas and energy than an individual. Strengths are maximised and weaknesses exposed and minimised.A team provides multiple perspectives on how to find solutions, be they actual or potential.Several alternatives are derived for each problem or situation. Teams simply do more than an individual.

The question is not whether you can do everything yourself, it is how soon you realise that you cannot.  Andrew Carnegie said: "It makes a big step in your development when you come to realise that other people can help you do a better job than you could do alone.”

"We should not only use all the brains we have, but all those we can borrow.” – Woodrow Wilson, President of the United States of America.

When people underestimate the difficulty of achieving big things or overcoming difficulties they try to go it alone.Don’t learn the truth too late and find yourself in a deeper hole than when you first started. Consultant John Ghegan has a sign on his desk which reads. "If I had to do it all over again, I’d get help!” Don’t try to do it on your own – create a tax team
 
Source: By Terry Scott (TaxTALK)

 
 


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