Tax season is around the corner...
While South African authorities battle to contain the surge of coronavirus infections, the South African Revenue Service (SARS) is preparing to process annual tax returns in unprecedented circumstances.
This year, tax returns will arguably be complicated by the ongoing national lockdown and will only kick off in September, instead of at the beginning of July as it previously occurred.
SARS will also be looking to implement an “auto assessment” system for a large group of taxpayers this year in a bid to simplify the process going forward.
The Beancounter is hard at work preparing for the tax season ahead, and our clients can rest assured that they will receive our full support every step of the way to make filing their tax returns a breeze.
Going forward, we will be sending you a monthly email around crucial information useful for every business owner as they navigate a post-Covid-19 world.
Here’s what you need to know about the 2020 tax returns season:
The key dates for the 2020 tax season:
The individual income tax return filing dates for 2020 (for the tax year 1 March 2019 - 29 February 2020):
- 1 September to 16 November 2020 - Digital tax returns (e-filing).
- 1 September to 22 October 2020 - Tax returns which cannot be filed electronically, and has to be completed by appointment at a SARS branch. You can make an appointment here.
- 1 September 2020 to 29 January 2021: Provisional taxpayers who file electronically.
What are Auto-Assessments and how will it work?
As mentioned, SARS will attempt to complete auto assessments for around 3 million taxpayers in South Africa during the upcoming tax season.
This simply means that the tax agency 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.
SARS said it will send all taxpayers who are selected for auto-assessment an SMS by the end of August. If an auto-assessment occurs, any under or overpayment of tax will be processed as normal.
If any taxpayer has concerns over the auto-assessment SARS made, they will still have the option to file their returns through e-filing or the SARS Mobile App as per usual.
If selected to be auto-assessed, it is very important that taxpayers compare the tax documents he or she received from his or her employer such as IRP5/IT3(a)s, medical aid scheme, banking institutions and other parties for the 2020 tax year with the SARS issued auto-assessment and ensure that the figures agree.
If they do not agree, it may mean that you miss out on tax relief, or that you underpay your taxes which SARS may later penalise you for.
What information is important before you file your tax returns?
- Make sure you have received your IRP5 from your employer, as well as any other relevant tax certificates such as medical aid and retirement annuity fund.
- If you received a travel allowance and/or employer-provided vehicle in 2020, you cannot claim any travel costs against travel income if you did not keep an accurate and complete logbook. The SARS template is great.
- Ensure you have all information around passive income such as interest and dividends earned, rental income and expenses. It is also important to have details on any assets (such as property, shares etc.) that you might have sold during the 2020 tax year.
Other useful information on tax returns:
- In light of the current national lockdown, SARS appointments may take longer to book as they are allowing fewer people inside branches. It is therefore encouraged that those who are able to complete their tax returns online do so.
- SARS has a comprehensive easy to follow guide to help anyone complete their tax returns. The guide can be found here.
- You can also watch one of SARS’s’ information videos to explain how to file tax returns here.
The Beancounter clients: We will be in touch with you by September to ensure that everything is in order for your tax returns. If you have any questions or concerns in the interim, please do not hesitate to contact your account manager. Please also inform us if you have received an SMS for auto-assessment from SARS so that we can verify that the auto-assessment is correct before accepting it.
Until next month…
Keep an eye out for our August mailer, as we will give you a few tips on the allowable SARS tax deductions to look out for.
We are just over halfway through 2020, and so much of our lives have changed permanently as the world adapts to a post-Covid-19 world.
Despite the difficulties presented, The Beancounter remains your trusted partner to adjust to the new reality. As always, never hesitate to contact us if you have any questions or concerns.