Taxpayers should be mindful of filing season changes

More than three million taxpayers will again receive an automatic assessment from the South African Revenue Service (Sars) this year. The filing season for the 2022/23 tax year kicks off on 7 July.

Sars has made several changes to the process and has published clear guidelines for taxpayers on how to respond to an auto-assessment and what to expect when they are required to file their own returns.

Read: A tax reprieve for the aggrieved

A major change for auto-assessed taxpayers is the time they have to revise their returns if they disagree with the assessment.

Last year taxpayers only had 40 business days from the date of the auto assessment. Sars has now extended this period to coincide with the normal filing due date for non-provisional taxpayers.

The filing dates for non-provisional taxpayers starts on 7 July at 20:00 and ends on 23 October.

“This will give those in the auto-assessment population more time to file a return if they wish to edit their auto-assessments,” says Sars.

Between 1 July and 7 July 2023, taxpayers will be notified by SMS or email if they were selected to receive an auto assessment. When people do receive an SMS or email, they should review their assessment to make sure it is correct.

Read: Relief for taxpayers

Nokukhanya Madilonga, senior manager at SNG Grant Thornton, advises taxpayers to ensure that their contact details are correct.

Taxpayer information, provided by third party data providers, is already available on eFiling, even though it may not be comprehensive yet.

People can make use of a new channel that was launched in March by dialling *134*7277# to find their tax number, to request an account balance, and even to request an appointment if necessary.

If a taxpayer agrees with the auto assessment there is no need to respond. However, if they disagree, they must amend and file the revised return by no later than 23 October.

“Taxpayers should be mindful that if they submit their returns after 23 October they will receive penalties because of late submission,” notes Madilonga.

Only individuals who were auto assessed will receive the SMS or email.

‘Apply your mind’

Webber Wentzel partner Joon Chong says the issuing of more auto assessments to taxpayers with less complicated tax affairs is in line with Sars’s Vision 2024 strategy.

“To facilitate a smoother 2023 filing season, Sars is now giving taxpayers who are auto-assessed until the due date of 23 October to file a return if they are not happy with their auto assessments.”

She notes that if Sars issues an auto assessment after 23 October, the 40 business days will start to run from the date of the notice of the auto assessment.

TaxTim, an online service that helps South Africans complete and submit their income tax returns, advises taxpayers to apply their minds before accepting their auto assessment.

“It may be inaccurate and accepting it could result in you paying more tax than necessary.”

Taxpayers should check if Sars has received all their tax certificates and whether it has the most up-to-date tax certificates.

Potential deductions

Taxpayers who potentially have deductions for wear and tear, home office expenses, donations to charities, travel expenses and medical expenses they paid personally may lose out claiming for these expenses if they accept the assessment.

Home office expenses have been a hot topic since more people started working from home during the Covid-19 pandemic. However, the potential to claim any expenses for salaried taxpayers remains limited.

Read:
Sars collects R1.68trn in taxes in 2022/23 fiscal year
Sars disallowed over 60% of home office claims last year
Legislative change addresses circumvention of donations tax

National Treasury promised in the February budget to release a discussion document this year to outline workplace practices and policies, changes in the current environment, and how different workplaces are affected by home office and travel allowance policies.

Provisional taxpayers

Provisional taxpayers (those with more than one income stream and additional expenses such as travel and home office expenses) will have from 7 July at 20:00 until 24 January 2024 to file their returns.

Another change this year relates to the declaration of assets. Taxpayers with business interests are required to declare their assets and liabilities (based on cost) in their tax returns each year.

Provisional taxpayers with assets above R50 million will however be required to declare specified assets at market value on their 2023 tax returns.

Madilonga says there is also a new field inserted in the tax return for individuals. It covers foreign income that is not reflected on the taxpayer’s tax certificate and to which the foreign income tax exemption does not apply.

There has also been an alignment of the systems at Sars and the Department of Home Affairs to match marital status.

People who are married in community of property will find that their information relating to interest, dividends, rental income, and capital gains have been prepopulated. Sars has done split and both taxpayers will be taxed 50% on the income.

Read: Emigration threatens SA tax system, Standard Bank says

Chong remarks that Sars’s Vision 2024 aims to achieve a “no filing season” for taxpayers in future. This means Sars will be able to collect taxes on an “ongoing basis” and not only when provisional and annual returns are filed.