You might think you are all in the clear, having recently submitted your tax returns to SARS. But then suddenly you are hit with the shock of a notification saying that penalties have been charged against you. To avoid this unpleasant situation, you need to be aware of when penalties are charged and how to avoid them.
How to avoid penalty charges
- Submit your tax return annually. If you fail to submit a tax return, SARS can charge you an administrative penalty which can be anything from R250 to R16 000 a month or R3000 to R192 000 a year.
- Ensure you have no old, unfiled tax returns. Many taxpayers are being fined for old unfiled tax returns, even if they were not required to submit tax returns at the time – and some no longer have the necessary documents to prove that they didn’t need to file a tax return at the time.
How to deal with ‘undeserved’ penalties
If you are 100% compliant and have received a penalty for a time when you were not required to submit a tax return, you can take proactive steps to dispute your penalty:
- The first step is to submit your outstanding tax return for this period, even if you have to submit a Rnil return so at least a return has been filed with SARS.
- The second step is to dispute your penalty amount with SARS. To do this you need to file a Request for Remission on SARS efiling.
- If your Request for Remission is disallowed, you can dispute this outcome by filing an objection with a “Notice of Appeal”, which you will find on the efiling Dispute menu. You can then choose to resolve the appeal via an “Alternative Dispute Resolution Process” or “Litigation” process. Select an option and submit.
It can take up to 60 days for SARS to review your dispute and issue a notice of completion.
When you don’t need to submit a return
A complete tax record will always stand in your favour, and even if you are not required to submit one, will ensure you never receive a penalty for a period in the past, should SARS change their submission rules. Currently, the rules state that:
Certain taxpayers, who earn a gross salary below R350 000 per annum, do not have to submit a tax return, but to be exempt, the following must apply:
- You must have no deductions or allowances
- No other income
- Have worked for one single employer and,
- Worked for a full 12-month period
How to always ensure compliance
Tax is not something to ever ignore and our clients’ tax matters are of the utmost importance to us. We will always ensure timeous and accurate submissions to SARS to ensure you are never faced with the pain of SARS penalties. For more information, contact our specialist tax team today for expert advice and assistance with both your business and individual tax.