Article by: Fourways Accountant: Annja Louca
Let's discuss auto assessments, which has become a hot topic lately. SARS is using third-party information, such as data from banks, medical aids, and investment companies, to perform auto assessments on taxpayers. If you have no additional deductions and this is your sole source of income, you won't have any issues, and it's great that your tax return has been filed.
If you're entitled to a refund, it will be paid to you promptly (according to the SARS website, within 72 hours of assessment).
For those with uncomplicated tax affairs, auto assessments can be very convenient. However, if you have more complex tax affairs, it's important to review the assessment carefully to ensure that it is accurate and that you're not missing out on any deductions or tax credits.
If you have additional income i.e., rental income, self-employment income etc. SARS will not know about this, and won’t include it in your assessment.
Also, any additional expenses like a travel log, donations, additional medical expenses etc. won’t be included in your auto assessment because SARS won’t know about these either.
You should have received an SMS from SARS informing you that you have been selected for auto-assessment - these would have started going out in July. Our experience is that not everyone is selected for auto-assessments, and we don’t know how SARS selects who gets auto-assessments.
If you don’t know if you have an auto-assessment, best to log into your SARS profile or the SARS Mobi-app or you can ask us to assist you. Please don’t assume it’s happening. You will have 40 working days to ‘not agree’ with the auto assessment and file a return if you want to include any income or expense.
SARS has made it easier this year, and you won’t need to accept if you agree with the auto-assessment.
Pumeza at Anlo says: ‘The frustrating thing we have experienced is when SARS does an auto assessment and the taxpayer is due a refund based on that information SARS has, but the taxpayer has to do a manual return and has tax to pay, they end up having to repay the refund and pay in additional taxes.’
Psychologically that just doesn’t work or sit well with anyone. SAICA and various other professional bodies are requesting SARS to review this process, as the taxpayer carries all the risk of the tax return being inaccurate.
We strongly urge you to make sure you know your auto assessment is correct before you finalise your tax affairs or start spending the refund, and make sure that the return is correct before filing because:
The auto assessment system implemented by SARS is a convenient way for taxpayers with simple tax affairs to file their returns quickly. However, if you accept an auto assessment without reviewing it and it turns out to be incorrect, you will be held responsible for any discrepancies. It is important to report all your income and expenses accurately to avoid penalties and legal action.
If you fail to correct your auto assessment and later get audited by SARS, they may discover any undeclared income and levy penalties of up to 200% of the tax payable, plus interest. SARS can investigate tax affairs up to five years back, and they have ways to gather information beyond just the tax return.
With everything being electronic and digital, SARS can access various online platforms, including social media, CIPC, and the Deeds office, to find out about additional businesses, income, or property that taxpayers may have.
To support clients in dealing with SARS-related matters, our team charges less for reviewing auto assessments. Our experienced professionals, Pumeza and Esmerelda, work with SARS on a daily basis and can provide guidance on the best way to handle SARS-related matters.
To contact Annja Louca email her at annja@anlofin.com or tel: 0116581324
