Tag: SARS

News: Tax mistakes may land you in jail

A planned change to legislation could mean that common errors with tax returns may be harshly penalised in future, including with jail time, Business Insider reported.

Specifically, section 34 of the draft Tax Administration Laws Amendment Bill, 2020 proposes to amend section 234 of the Tax Administration Act, which will remove the concept of willfulness (“intention) from the range of acts that constitute an offence under the TA Act. If you are found guilty, the maximum penalty is two years’ imprisonment.

It would mean that you could be guilty of an offence if you neglect to, for example,

  • notified SARS of a change in registered details (addresses, bank accounts and email addresses),
  • a change in public officer,
  • submitting a return or document to SARS,
  • responding to a request for documents or information from SARS, maintain records or pay taxes when due.

Problems that could result in harsh punishment include:

  • Supporting documents being misplaced, or clerical errors, which result in adjustments to VAT returns by SARS.
  • As VAT is a self-assessed tax, any adjustments to the return inevitably results in the taxpayer having failed to pay VAT to SARS on time.
  • Late payments of VAT or PAYE by businesses, where a payment is only released late on a Friday night, and is not received by SARS until the next day.
  • Taxpayers that are unaware they may have a tax liability due to increasing complex provisions of the tax laws, and then fail to pay the correct amount of VAT or PAYE to SARS timeously.

These considerations do not appear to concern the government, and it is likely that if passed, the threat of criminal sanction will be used by SARS to force taxpayers to comply with their obligations, particularly relating to the filing of returns and payment of tax debts.

Business Insider SA

News: From 1 Sept SARS offers new service to help with tax returns.

The South African Revenue Service has announced it will be introducing a number of new service offerings from 1 September to assist taxpayers in the next phase of individual filing season.

Sars emphasized that as far as possible, taxpayers are discouraged to go to their offices, but should continue to use the online electronic filing platform.

Those needing assistance may also book with one of their agents via a virtual appointment for a guided filing experience to complete their submission, The Citizen reported.

To help taxpayers SARS is introducing the following:

  •  A toll-free number for taxpayers to call and make branch appointments. The number to call is 0800 11 7277.
    Operating hours are Monday, Tuesday, Thursday and Friday from 8am to 4pm, and on Wednesdays from 9am to 4pm.
    Enhancements to the current eBooking system on the Sars website.
  • From 1 September, the eBooking system will give the taxpayer confirmation in real-time of their booking slot with their case number and also advise them of supporting documents that they may need to take along with them for their appointment.
  • With both the toll-free number and the online eBooking system, taxpayers will have the option of booking a virtual session with a Sars agent – via video or voice call. This would especially be helpful for the elderly, disabled or those who live far from a tax office. If they choose the video option, taxpayers will be sent a link to the video call which they can access on the day of the appointment. For video calls, taxpayers will need to have either a smartphone with a camera or a Personal Computer (PC) with a camera to start and conclude a video appointment. No special software is needed for this virtual engagement.

Sars says it will be calling certain taxpayers who have been sent auto-assessment SMSes and have not responded. The call will be to ascertain why they have not accepted their auto assessments and to help them either to accept or edit their return and submit it on their behalf.

  • Have all been auto-assessed
  • Have a refund due to them
  • Submitted their returns at a branch last year
  • Have not responded to an auto-assessment SMS.

Complaints:

Some taxpayers have complained about the lengthy waiting times when they call the Contact Centre, which is often the case during this early phase of filing season. However, taxpayers can use other query channels instead of calling the Contact Centre.

Go to the Sars website:

https://www.sars.gov.za/Contact/Pages/default.aspx

 

News: Beware of accepting your SARS auto-assessment without checking it

According to My Broadband, Tax Consulting South Africa has warned taxpayers to think twice before accepting SARS’s auto-assessments of their tax returns.

The tax collecting authority has announced that it will assess around 3.1 million taxpayers automatically during August.

Head of Individual Tax Returns at Tax Consulting South Africa Thamsanqa Msiza said the impression that the automatic assessment of certain taxpayers means that they no longer need to worry about their tax submissions was incorrect.

“The onus still lies with the taxpayer to ensure all information submitted to SARS is complete and correct,” Msiza stated.

He cautioned that before accepting the precompiled assessment, qualifying taxpayers should take time to check that all relevant data is present and accurate.

Neglecting to check the data for completeness and accuracy may be seen by the tax authority as a deliberate attempt to evade tax and could result in stiff penalties, Tax Consulting South Africa warned.

How SARS conducts auto-assessments 

  • SARS is able to complete certain taxpayers’ submissions by collecting electronic tax data from relevant parties.
  • These could include certificates provided by employers, financial institutions, medical schemes, retirement annuity fund administrators, and other third-party data providers.
  • It, therefore, needs little input from the taxpayer to complete the return submission.
  • Qualifying taxpayers will be notified by SMS and can access their precompiled assessment through eFiling or SARS’s MobiApp.
  • From here, they can review the assessment and click on the Accept button to accept the figures, or click the Edit button to amend the information.

Possible issues

However, Tax Consulting South Africa explained how the data in the assessment may be incomplete or inaccurate.

“Apart from this being a new system and therefore prone to teething problems, there are several other reasons why the precompiled information may be inaccurate,” warned Msiza.

“Even those who are employed may earn extra on the side from gigs, property rentals or other sources of income.”

“Similarly, individuals who are self-employed and have received taxable earnings exceeding R83,100 in the 2019/2020 tax year, will be considered Provisional Taxpayers and must declare this income as SARS will have no record of it,” Msiza added.

Other instances highlighted by Msiza include where an investment tax certificate, for example, may appear on the assessment, although the taxpayer holds no such investment.

In another case, an employer may have failed to submit a copy of the employee’s IRP5.

There may also be outstanding deductions, such as:

  • Log book mileage against one’s travel allowance, that can only be captured from an employee’s own records.
  • Donations for which no tax certificate has been loaded on the return.

“In cases like these, the taxpayer must approach the issuer to correct the data and resubmit it to SARS promptly,” Msiza advised.

Check your SMS and seek professional advice

To avoid any failure to report earnings accurately, Msiza said taxpayers who qualify for the auto-assessment should check SARS’s preloaded information carefully against their own certificates.

Additionally, those with complex tax affairs should be particularly cautious and should seek direction from their tax attorney or tax practitioner.

News: How the automated tax filing system works.

The South Africa Revenue Service (SARS) has sought to explain how its auto-assessment system operates, as it attempts to move more than 3 million taxpayers from physical filing to online filing, SABC news reported.

SARS has urged people to use their e-filing online system or mobi-app – as an option to file their tax returns this year.

“The outcome that SARS will derive, using all the data that we receive from your employer, the paperwork from your income, as well as the deductions. It’s the data we will get from your bank, pension fund and medical aid – that will be your core data. Calculation done by the risk engine, taking into account all of the data and the historical data, it will produce an outcome that should be exactly the same as if you would submit the data to us,” says Kieswetter.

SARS Commissioner, Edward Kieswetter, has also warned people to be vigilant of fraudulent emails and SMSes that claim to be from SARS.

Several taxpayers raised concerns over receiving emails and SMSes with false information – made to look as if messages were sent from SARS.

Kieswetter says they will never request banking details via email, post or SMSes.

“We became aware of a fake SMS and we would ask taxpayers to have a careful read at the SMS that is sent and our website address is very clear www.sars@gov.co.za and not to accept anything other than that and if they are not clear to rather call our call centres. We would encourage taxpayers to use the official mobile app or the e-filing system, which is the safest way to store your data,” says Kieswetter.

 If you have received a SMS from SARS, watch these easy steps in their videos on how to view the auto assessment on eFiling or on MobiApp.

 

 

News: SARS is sending out “ auto assessed” SMSes, and what you should do.

SA Revenue Service is currently sending out 3.1 million SMSes to taxpayers whose returns will be assessed automatically this year.

If you receive an SMS, this means that SARS will complete your return with all the information it received for you – gathered from your employer, bank, medical scheme, retirement annuity administrator and other companies – and send you an assessment. If you accept it, you won’t have to file a tax return at all.

By yesterday midday, 62,500 taxpayers already accepted their auto-assessments, SARS Commissioner Edward Kieswetter told Netwerk24 yesterday. Those who were automatically assessed and are owed money from SARS, will receive it in the first week of August.

How do you know if you will be auto-assessed?

  • SARS will send you an SMS by end-August to alert you that your completed return is available in eFiling or on the SARS mobile app.
  • If you accept the assessment and a refund is due, it will be paid into to your bank account by the first week of August, Kieswetter said yesterday.

What happens if you don’t accept the auto-assessment?

  • If you dispute the assessment, you can file your edited tax return electronically by 16 November.

What should you look out for?

  • Each taxpayer needs to validate their auto-prepared tax return with the information they received from third parties, before accepting the assessment, says Thamsanqa Msiza, head of individual tax returns at Tax Consulting SA.
  • Check your IRP5/IT3(a)s and other tax certificates like your medical certificate, retirement annuity fund certificate and other third-party data against the information provided in the return.
  • If you don’t have the certificates yet, contact your employer, medical scheme, retirement annuity fund and other third parties to get it.
  • “Only once a taxpayer has compared the tax documents he or she received from his or her employer, medical aid scheme, banking institutions and other parties in respect of the 2020 tax year to the SARS issued auto-assessment and agreed the figures, can one accept the auto-assessment,” says Doné Howell, director of BDO Tax Services.
  • Taxpayers who have more complex returns – i.e. travel allowance claims – will need to carefully review their auto-assessments, Msiza says.

Are there any dangers to being auto-assessed?

  • One concern is that SARS will issue auto-assessments based only on the data which third parties are obliged to submit to SARS, and to the extent that such data meets its verification process, says Howell.
  • This means that additional income or deductions may not be included.
  • For example, if you made a donation to a qualifying organisation, you may be able to claim a tax deduction. Or if you started to trade and now earn business income, this may also not be reflected in the tax return.
  • You may also have had home office expenses that can be deducted, or claims that your medical aid did not pay, which may not be reflected on your return.
  • If you accept the auto-completed tax return without adding these deductions, you may miss out on tax relief.
  • Alternatively, you could face tax penalties if SARS later confirms that you earned income that wasn’t declared.

Didn’t receive an SMS?

  • Taxpayers who aren’t automatically assessed need to submit their returns from start-September.
  • The deadline for returns submitted at SARS offices is October 22nd. Online returns need to be submitted by November 16.
  • The deadline is 29 January for provisional taxpayers.

Lockdown: Work from home till October, and SARS will let you claim home office costs

Amid some recent uncertainty, the SA Revenue Service, confirmed to Business Insider that full-time employees will be able to claim home-office expenses during lockdown.

Typically, people who earn commission and independent contractors claim these expenses.

But full-time employees can also claim if they work from home for at least six months of the tax year. This means that you would have to work from home at least until the end of September, if you left the office at the start of the national lockdown.

If an employee’s duties are mainly performed from their home, they will be able to claim some expenses, a SARS spokesperson confirmed to Business Insider SA.

“To take a simple example, if an employee works normal office hours for a single employer for the tax year from 1 March 2020 to 28 February 2021, this requirement will be met if the employee performs their duties from the home office for more than half the year,” the spokesperson said.

However, your home office must be specifically equipped for work – and “regularly and exclusively used” for such purposes, he added. This means that you must have a dedicated work area – you can’t just use your dining room table for work.

These are some of the expenses you can claim for a home office:

  1. Part of the interest on your bond, or part of the rental of the home – as well as municipal rates and taxes, including water and electricity. This will take into account the floorspace of your home office, compared to the total floor area of your house. If, for example, your home office is 20 square metres and your house is 200 square metres then you can deduct 10% of the qualifying expenses such as rates and taxes or interest payable on bonds. You can’t deduct all your expenses.
  2. You can also claim for stationery, and data costs.
  3. Wear and tear on office equipment.

Importantly, if you own your home, claiming home office expenses could cost you in extra capital gains tax (CGT) when you sell.

For primary residences, the first R2 million of any capital gain on selling is not taxed. But if you tell Sars that part of your home isn’t a residence, but an income-generating office, that part of your home is excluded from the capital-gains tax break.

So if you claim 10% of the floorspace of the home as an office, then 10% of the eventual selling price could be liable for CGT, at a rate of 40%. However, the CGT calculation also takes into consideration the length of time over which you use your home office

In addition, if your employer reimbursed you for data costs, stationery or other expenses – you may not have to pay tax on these payments.

“(An) employer’s reimbursement of an expense incurred by an employee is not taxable if the expense has been incurred at the employer’s instruction, for the employer’s trade, and the employee must account for it to the employer to prove that it has only been used for that purpose,” the SARS spokesperson said.

Examples of reimbursed expenses that would not be subject to tax would be data bundles purchased to work from home and stationery used for work purposes.

 

Photo Credit : Unsplash

 

TAX NEWS: SARS may auto assess your tax return.

This year, the SA Revenue Service says it will assess “a significant number” of taxpayers automatically according to Business Insider.

This means that it will complete your return with all the information it received for you, gathered from your employer, bank, medical scheme, retirement annuity administrator and other companies  and send you an assessment.

If you accept it, you won’t have to file a tax return at all.

How do you know if you will be auto-assessed?

According to Business Insider, SARS will send you an SMS by end-August to alert you that your completed return is available in eFiling or on the SARS mobile app.

If you accept the assessment and a refund is due, it will be paid into to your bank account.

What happens if you don’t accept the auto-assessment?

If you dispute the assessment, you can file your edited tax return electronically by 16 November.

What should you look out for?

  • Each taxpayer needs to validate their auto-prepared tax return with the information they received from third parties, before accepting the assessment, says Thamsanqa Msiza, head of individual tax returns at Tax Consulting SA.
  • Check your IRP5/IT3(a)s and other tax certificates like your medical certificate, retirement annuity fund certificate and other third-party data against the information provided in the return.
  • If you don’t have the certificates yet, contact your employer, medical scheme, retirement annuity fund and other third parties to get it.

“Only once a taxpayer has compared the tax documents he or she received from his or her employer, medical aid scheme, banking institutions and other parties in respect of the 2020 tax year to the SARS issued auto-assessment and agreed the figures, can one accept the auto-assessment,” says Doné Howell, director of BDO Tax Services.

Taxpayers who have more complex returns – i.e. travel allowance claims – will need to carefully review their auto-assessments, Msiza says.

Are there any dangers to being auto-assessed?

One concern is that SARS will issue auto-assessments based only on the data which third parties are obliged to submit to SARS, and to the extent that such data meets its verification process, says Howell.

This means that additional income or deductions may not be included.

For example, if you made a donation to a qualifying organisation, you may be able to claim a tax deduction. Or if you started to trade and now earn business income, this may also not be reflected in the tax return.

You may also have had home office expenses that can be deducted, or claims that your medical aid did not pay, which may not be reflected on your return.

If you accept the auto-completed tax return without adding these deductions, you may miss out on tax relief.

Alternatively, you could face tax penalties if SARS later confirms that you earned income that wasn’t declared.

Source: Business Insider.

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