June 30, 2022

SARS is changing auto-assessments for taxpayers – what you should know

SARS has launched some modifications to the auto evaluation course of this yr to make it simpler for taxpayers to file their revenue tax returns, says Joon Chong, companion at Webber Wentzel.

An auto evaluation is based mostly on knowledge acquired from employers, medical aids, banks, retirement annuity funds, and so on. As soon as SARS has accomplished the auto evaluation, it is going to notify the taxpayer by SMS or e-mail, and the taxpayer will be capable to view it on the eFiling web site or the SARS MobiApp.

Taxpayers can view the third-party knowledge that was used to prepopulate the return to verify that the info is appropriate.

If the taxpayer is happy that the auto evaluation is appropriate and comprises all related data, and a refund is due, they don’t have to take any motion to “submit” the evaluation.

If they’re happy it is appropriate, however they’re as a result of make a cost to SARS, they have to achieve this inside the cost due date specified on the Discover of Evaluation (ITA34).

“However, if a taxpayer believes the auto assessment is incorrect, or does not contain information on all sources of income (e.g., rental) or allowable deductions, they must access and complete their tax return and file it within 40 business days,” Chong mentioned.

“If this is not possible, they can apply for an extension via eFiling or the SARS MobiApp before the 40 days is up or within 21 business days of the 40 days on the basis of reasonable grounds. Extensions beyond 21 business days will only be granted on exceptional grounds, which may be difficult to justify.”


Penalties 

Chong mentioned there are administrative penalties for the late submitting of a tax return.

Beforehand, penalties solely kicked in when two or extra tax returns have been excellent. Nevertheless, since December 2021, SARS will levy administrative penalties when a couple of tax return is excellent.

These penalties are based mostly on taxable revenue, they usually can vary from R250 to R16,000 for every month that the return is excellent. These penalties begin to mount from the primary day that the return is late.


The best way to put together 

Chong outlined the highest 10 issues you can do to organize for the 2022 submitting season:

  • Register on eFiling or the SARS MobiApp and keep away from these queues.
  • Verify that your financial institution particulars are appropriate and if mandatory, appropriate or confirm them particularly if you expect a refund from SARS.
  • Collate supporting paperwork to finish your tax return if you produce other sources of revenue, or if you declare medical bills.
  • Verify if you are a provisional taxpayer. Provisional taxpayers should file their returns by 23 January 2023, however non-provisional taxpayers have earlier submitting dates.
  • If you solely obtain a wage and curiosity of lower than R23,800 (below 65) or lower than R34,500 (65 and older), and no different sources of revenue, then you are in all probability not a provisional taxpayer. You will have to file your returns by 24 October 2022 (until you are auto-assessed.)
  • If you aren’t a provisional taxpayer and solely obtain wage and curiosity from a financial institution, then you could also be auto-assessed and be issued with an evaluation by SARS pre-populated with third-party knowledge. Look out for the SMS or e-mail from SARS that your auto-assessment within the type of an evaluation is on eFiling or MobiApp prepared for you to view.
  • As soon as you obtain the auto-assessment SMS or e-mail from SARS, log onto eFiling and verify the evaluation and the third-party knowledge used to calculate the tax or refund due. If you are pleased with the evaluation, you needn’t “submit” the evaluation. (This is completely different to the 2021 submitting season which required you to submit the estimated evaluation.) If a refund is as a result of you, the SARS web site states that the refund course of takes about 72 hours from the date the evaluation was issued to you. If you owe SARS tax, you might want to pay by the due date on the evaluation in any other case, there will probably be curiosity.
  • If you aren’t pleased with the evaluation, you might want to receive and full a tax return on eFiling inside 40 enterprise days from the date the evaluation was issued. (Nevertheless, if you aren’t pleased with the third-party knowledge used, you will first have to get the info corrected with the related third get together.) The requirement to acquire and full a return inside 40 enterprise days is one thing new this submitting season. For instance, if you are auto-assessed and you are sad with this evaluation which was issued on 1 July 2022, you might want to receive and full a tax return by 29 August 2022 (i.e., 40 enterprise days after 1 July 2022).
  • What if you aren’t completely happy along with your evaluation from the auto-assessment and want extra time to finish the tax return? SARS can grant an extension for you to file the return if a request with cheap grounds is made ideally, inside the 40 enterprise days after the date your evaluation was issued to you. If you are late, you can nonetheless request an extension with cheap grounds inside 21 enterprise days after the 40 enterprise days of the date the evaluation was issued to you.
  • Beware admin penalties – and right here, there is somewhat uncertainty on due dates for taxpayers who’re auto-assessed however wish to file tax returns and people that aren’t auto-assessed and wish to file tax returns. It seems (though it is not 100% clear), that your due date to file the finished return could also be before 24 October 2022 if you are auto-assessed however wish to file a return. If you are auto-assessed and are granted an extension to file the return, we propose submitting the return by the date that your extension permits you to take action even when this date is sooner than 24 October 2022.

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