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Tax certificate uploads: How to avoid SARS issues

Check, check, and check again …

The SARS e-filing system has come a long way from its humble beginnings, and it is clear that the tax office is moving ever-closer to a situation whereby the majority of taxpayers will no longer be required to submit a return each year—employers, investment funds, and medical schemes will simply upload everything directly.

However, as the whole saying goes, any system—no matter how sophisticated it may be—is subject to the GIGO principle.  In other words, it will only reproduce what you feed into it.  If you put garbage in, you get garbage out.  So here are a few tips that taxpayers and third-party providers can help avoid issues with SARS when it comes to uploading these certificates:

Taxpayers

Contact each organisation that uploads information directly to SARS, and ensure that their records are correct.  This includes your full name, current physical and postal addresses, ID number, and income tax number.

When any of the above information changes, contact all institutions concerned with the updated information.

Institutions

When opening a new account, make sure that you obtain all relevant information from your client.  Since this information is required as part of the FICA process in any event, there is no excuse for not obtaining this information upfront.  Strictly speaking, you shouldn’t be permitted to open an account without it.

Beef up your quality control purposes when it comes to correctly capturing the information onto your systems.  Modern systems should allow you to build algorithms to check the validity of ID and tax numbers since both numbers follow a pre-determined structure.  Screens can also be programmed to disallow the creation of a new record with missing information

Just one incorrect digit on a SARS tax code can create untold levels of grief for your client—ditto if the details on the tax directive and the IRP5 don’t match.  Take extra special care of these.

Before doing your final upload to SARS, it’s worthwhile sending your client confirmation of what you plan to submit to SARS so that they can check it for correctness.  If they don’t respond within a predetermined time period, then it’s on them to deal with the fallout should anything go wrong.

If despite your best efforts, things still go wrong, please go the extra mile to help your client put things right.  There are some things that SARS requires them to do, but there are others that only you can do.  Remember that time is of the essence—and know that SARS can be extremely sticky when it comes to the remission of penalties.

Finally, as a tax practitioner, I have no qualms whatsoever in reporting an uncooperative employer or institution to SARS.  On the (admittedly rare) occasions where I have resorted to this, SARS has generally taken a dim view and has ended up making life rather unpleasant for the organisation concerned.  Unless you want your payroll department to be invaded by SARS auditors, it is in your interest to assist your client (and their tax practitioner) as much as possible in getting the matter resolved.

WRITTEN BY Steven Jones

Steven Jones is a registered SARS tax practitioner, a practising member of the South African Institute of Professional Accountants, and the editor of Personal Finance and Tax Breaks.

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes and should not be construed as financial advice. Errors and omissions excepted. (E&OE)

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