Last week, a former client who had switched to a cheaper service provider called me. He inquired about tax planning for a company car registered under an employee’s name.

Specifically, he asked if the employee should charge car rental to the company!!!

I explained that, according to the Inland Revenue Board’s Public Ruling, the company can capitalize the car as an asset.

However, they must also account for the benefit-in-kind (BIK) provided to the employee.

This involves reporting the BIK value in the employee’s EA Form and considering it in the monthly tax deduction calculations.

Typically, I avoid providing tax advice over the phone without a full context, especially to ex-clients or the public.

It’s risky and can lead to misunderstandings.

But this question was straightforward, so I made an exception.

After the call, I couldn’t help but wonder: why didn’t he consult his current service provider?

This experience serves as a reminder.

While it’s tempting to assist former clients, it’s crucial to maintain professional boundaries.

Offering advice without comprehensive information can lead to complications.

To my fellow professionals … do you entertain your ex-client?