You manage clients' money. But one tax mistake could leave you paying out of your own pocket.
If you run an agency, this is for you.
When you pay suppliers on behalf of your clients, you may be required to deduct tax from certain payments and send it to KRA.
That's where things can go wrong.
If you're supposed to deduct this tax but fail to do so, KRA may hold you responsible for the amount.
"But the supplier already paid their taxes!"
That argument has not always worked for periods before the relevant changes introduced by the Finance Act 2025 took effect.
The supplier paying their taxes doesn't automatically clear your responsibility.
And if KRA instructs your bank to recover a tax debt from your account, don't assume you have no options.
Depending on the circumstances, you may be able to challenge the recovery, dispute the tax assessment or arrange to pay through an approved payment plan.
But deadlines and the correct procedures matter.
Managing a client's budget isn't just about tracking where the money goes.
It's also about understanding the tax responsibilities that come with each payment.
Before paying suppliers, establish whether you need to deduct any tax and submit it to KRA.
Because a mistake made while handling your client's money could become a financial problem for your own business.
