Everything you need to know about the changes to the 2019/2020 tax filing season

*This content is brought to you by Sable International

On 5 May 2020, the Commissioner of the South African Revenue Service (SARS), Edward Kieswetter, announced changes to the 2019/20 personal tax filing season. Here’s what you need to know to ensure you remain compliant this tax season.

SARS has outlined changes on an operational level as well as to the submission deadlines in an attempt to alleviate the impact of COVID-19 on South African taxpayers. SARS is in support of social distancing rules and has responded by increasing efforts to further simplify the tax return filing requirements for individual taxpayers and removing the need to travel to a branch. SARS has also announced that there will be a three-phased approach to filing dates. Here’s what is to be expected of taxpayers along with key dates of each phase:

Phase 1: Employer and third-party filing

This refers to employer filing and also applies to third-party institutions such as banks, insurance companies and medical savings and insurance schemes.

15 April 2020 – 31 May 2020

Phase 2: Tax file updates

In phase two, taxpayers will have the opportunity to change and update information on the SARS system. If your personal details have changed, such as your banking details, postal and physical address, you need to let SARS know. This can also be done on your income tax return when you lodge it.

SARS will also issue self-assessments to individual taxpayers who meet certain criteria based on their income threshold to determine whether they need to render a tax return. This will be based on the third-party information supplied to SARS. If you disagree with the auto assessment you will be able to file your alterations from 1 September 2020.

1 June 2020 – 31 August 2020

Phase 3: Employee filing

Non-provisional taxpayers

If you are visiting a SARS branch to file your tax return, you can file from 1 September 2020 and the deadline for filing is 22 October 2020. If you are filing your tax return via eFiling, you can file from 1 September 2020 and the deadline is 16 November 2020.

Provisional taxpayers

If you’re a provisional taxpayer, you’re required to file your tax returns from 1 September with a deadline of 31 January. Any disputes over assessments will happen until November 2020.

1 September 2020- 31 January 2021

What does this mean for taxpayers?

It means that those tax payers relying on refunds from SARS over the winter months will no longer be able to rely on obtain this cash flow. It is therefore likely that you will only get your refund closer to Christmas.

It also means that when the 1st of September comes the queues at SARS are likely to be even longer than normal.

What does this mean for tax practitioners?

Many SARS branches have been closed or are operating at a significantly reduced capability and have a backlog of work. The decision by SARS to shift the start date of tax season back two months from July to September means tax practitioners are likely going to become overloaded and have less time to complete returns this tax season. They are going to have to do the same work load with 2 months less time to do it in.

Our advice to avoid frustrations or potential delays is to ensure you have all your documents and relevant information in place to make it as simple as possible for your practitioner to find the necessary information they require to file your returns. We also suggest sending in your documents early so your Tax Practitioner can prepare your filing early.

What documents you need to prepare before filing starts

Now is a good time to get your tax matters ready to ensure a smooth filing experience. It’s also important that you reset your eFiling username and password if you have forgotten them.

Make sure that you have received your IRP5/IT3(a)s and other tax certificates like your:

  • Medical aid certificate
  • Retirement annuity fund certificate
  • Other third-party data that is relevant in determining your tax obligations
  • Especially your IT3(b)s from financial institutions as SARS will have all this information and a mismatch in submitting this information will trigger a request for supporting documents which can delay getting your tax affairs in order and also any refund due

Finally, update your personal information such as banking details, address and contact details online on eFiling or the SARS MobiApp. It is crucial that your information is consistent on each certificate and piece of documentation to make sure there are no delays in getting your tax refund.

Avoid costly mistakes

If you’re required to submit a South African Tax return and fail to do so, or if SARS thinks you need to and you don’t, you will be required to pay an administrative penalty. For outstanding returns, penalties can range up to R16,000 a month for higher-earning taxpayers and individuals have been convicted and sentenced in the past for failure to submit.

SARS will be tougher this tax season and you are expected to meet your tax obligations despite the current circumstances. We strongly recommend seeking advice from a professional tax consultant.

If you need help filing your South African tax returns, are unsure about your tax residency status or need advice on other tax matters, our South African tax practitioners can assist.  Get in touch on +27 (0) 21 657 1517 or at [email protected].