EXPLAINER | Filing the correct tax return is your responsibility - top tips from experts

Be careful to check any auto-assessment and be especially careful before you spend any refund paid to you based on that auto-assessment – if it is not correct, you will have to pay back the money, warns Laura du Preez.

Filing a tax return with the correct information is your responsibility and an auto-assessment sent to you by the South African Revenue Service (SARS) does not absolve you of that responsibility, tax practitioners say.

So be careful to check any auto-assessment and be especially careful before you spend any refund paid to you based on that auto-assessment – if it is not correct, you will have to pay back the money.

SARS has been sending auto-assessments to millions of taxpayers since June 30. Where these auto-assessments show a refund due, the money has been paid to the taxpayer within three days, Joon Chong, a partner at Weber Wentzel, says.

The assessments and the refund may therefore have been paid before it was even possible for you to correct an auto-assessment on SARS's eFiling system, as 2023 returns have only been available for submission since Friday, July 7.

Check the assessment

If you were incorrectly refunded tax you have paid, you will have to repay the money and also pay any additional tax you may owe, Doné Howell, a tax director at BDO, says.

If you received an auto-assessment, it is intended to assist you with an already-completed tax return based on information SARS has collected from your employer, bank, and financial institutions.  

However, Howell says tax practitioners strongly recommend you check the return as it is your responsibility to make a full and complete declaration to SARS.

Nicholas Botha, tax team compliance and processing manager at SA Tax Consulting, says it is important to ensure the information provided by your employer or financial institution is correct and that there isn't any information that SARS should have about your income – or deductions – which it was not able to pick up from financial institutions.

If you have received an auto-assessment, you have until October 23 to file the correct return on eFiling or SARS will submit the auto-assessment as your return.

Last year's 40-day deadline to correct an auto-assessment no longer applies unless the auto-assessment is issued after October 23, Howell says.

This means most taxpayers – other than provisional taxpayers – have until the end of the tax season to declare their income for the tax year March 2022 to February 2023.

The deadline for provisional taxpayers – those running businesses and earning other income from which tax is not deducted – to file their final tax return for the 2023 year is January 24 2024. Provisional taxpayers will need to file their first return for the current tax year in August this year.

Why auto-assessments may be wrong

Botha says there are a number of reasons the auto-assessment may be incorrect, including:

SARS does not have all your tax certificates or your tax certificates are incorrect.

You earn freelance income or make money from a side hustle and you do not receive an IRP5 for this income.

You earn income from a rental property.

You work for a foreign company which does not issue an IRP5. SARS has introduced three new source codes for these taxpayers depending on whether they can or cannot claim the R1.25 million exemption on foreign income (you must be out of the country for 183 days in the tax year to claim this) or more if you are working at sea.

You have earned income or made capital gains on foreign investments.

You have medical expenses that you can claim as a deduction.

You have travel expenses that you can claim as a deduction.

You have home office expenses that you claim as a deduction. You have made tax deductible donations.

Do you need to file a return?

SARS has stated that you do not need to file a tax return if you are a salary earner or pensioner earning an income of less than R500 000 for the year from a single employer or pension from which Pay As You Earn (PAYE) tax is deducted. 

However, there are a number of reasons why you may still need to file a return – for example, if you earned rental income or made capital gains.

You also need to file a return if SARS sends you an auto-assessment that is incorrect, the practitioners say.

The onus is on you to ensure your tax return is correct and if SARS later finds out that you did not declare income that you should have, you could face a tax evasion case with penalties and interest, Botha says.

Chong says if you correct an auto-assessment, SARS may then select you for verification. If this happens, you will need to upload your supporting documents on eFiling.

Be sure to avoid penalties

Whether you have been auto-assessed or not, be sure you correct the auto-assessment or file a return on time.

SARS has promised to make failing to comply with your tax obligations hard and costly, and Botha says he has been surprised at how intense the penalties have been.

The Tax Administration Act was amended with effect from December last year, introducing penalties for those with just one tax return outstanding and in the first five months of this year, SARS imposed R380 million in penalties on close to 700 000 taxpayers. 

The penalty for a late return – including a late correction of an auto-assessment - ranges between R250 and R16 000 a month, depending on the amount of tax you owe, and it can be imposed for up to 35 months.

You may also be charged interest on the outstanding tax.

The deadline to pay tax you owe

If you are auto-assessed and the assessment is correct, you will only need to pay the tax your assessment states you owe 30 days after the end of the tax filing season on October 23, Botha says.

If you submit a return or amend an auto-assessment, you will have 30 days after you receive the assessment or amended assessment to pay the tax.  

If you are not happy with an assessment

Botha says this tax season SARS is allowing taxpayers to ask for a review of an assessment through eFiling. This is useful for administrative errors – for example, where a deduction has been overlooked or an amount captured incorrectly.

You should still lodge an objection if you disagree with SARS's tax treatment of your income or deductions, he says.

This article was first published on SmartAboutMoney.co.za, an initiative by the Association for Savings and Investment South Africa (ASISA). 

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