I know someone who has been trading as a plumber for the past 7 years ago or so, as a sole proprietor.

He immigrated to South Africa from Zimbabwe just before he started trading here, and has since obtained South African citizenship and he has a South African ID book. He is about 50 years of age.

However, he has never registered as a taxpayer nor has he registered for UIF and WCA (he has about 4 employees, one of which has worked for him for the past 5 years).

He now finds himself in a situation where is no longer getting plumbing contracts on development sites because he is not registered for WCA, and is losing quite a lot of business as a result.

Before he can register for WCA (or UIF for that matter), he needs to register as a taxpayer.

Therein lies the rub...

He is petrified that, if he registers as a taxpayer, he will expose himself to scrutiny by SARS and could be held liable for huge amounts of unpaid taxes, penalties and interest.

What are his options, and what is SARS likely to do if he registers as a taxpayer now?

His bookkeeper has suggested that he reinvent his plumbing business as a "new" business, register for tax in the business name and in his personal capacity and, if questioned by SARS as to how he survived financially prior to starting his business, he could say he was a "kept" man since immigrating from Zimbabwe. I am not too sure whether this strategy will shield him at all.

I look forward to hearing your opinions.