DEBT COLLECTION - BENEFITS OF EARLY INTERVENTION

At Pieterse Sellner Erasmus TRM Tax Attorneys, we specialize in the law pertaining to taxes, but over the years have expanded our services with the aim of providing a holistic service offering to our clients. As such, we have built a diverse client base an offer them, amongst other things, an efficient and effective debt collection service, with one of our associates heading this department having more than 12 years’ experience in the field

Over this period, one thing has become apparent and that is that new debt, or “freshly” overdue debt is easier to recover as contact information is current and defaulters, or debtors, are aware of their obligation to make payment. Usually, with minimum intervention, these monies are recovered and our clients have their hard earned money back in their pockets. Clients further benefit as the process prevents debtors from becoming long term defaulters as debtors are assured that action will be taken immediately in the event of them defaulting again.

On the other hand, if, after interventions, a debt is classified as unlikely to be recovered and such debt can be considered “bad” within the scope of the Income Tax Act, Act 58 of 1962, Clients, in their capacity as taxpayers, can reduce their liability to SARS by claiming a doubtful debt allowance.

However, again, early intervention is the key as the Act requires that such debt must have become “bad” during the year of assessment and must have been included as gross income in the same year, or previous year of assessment in which it is claimed.

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The contents of any article published by Pieterse Sellner Erasmus should not be construed as professional legal advice.