Most businesses assume they can only claim a tax deduction on a bad debt once they have written it off or raised a formal provision. That assumption is costing them money. Under Section 11(j) of the Income Tax Act, where IFRS 9 is not applied to trade debtors, a 25% tax allowance kicks in automatically once a debt hits 60 days overdue. At 120 days, that rises to 40%. No accounting provision required. No subjective judgement call on whether the debt is "truly doubtful." If the debt is old enough, the relief is yours. Many businesses are quietly leaving this money on the table simply because no one told them the rules changed.

Owing SARS money can feel like a never-ending burden, interest piles up, penalties grow, and enforcement looms. But for a limited time, taxpayers have a chance to hit reset. Through the SARS’s Expedited Tax-Debt Compromise Process, qualifying taxpayers may be able to settle their debt for less than the full amount, clear their tax record, and move forward with peace of mind.