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Auto-assessments: Your tax return hasn’t been filed until you say ‘Yay’ or ‘Nay’

Taxpayers should note that their acceptance – or rejection – of an auto-assessment is not automatic: they must let Sars know whether they agree with it or not.
There is no guarantee that a prepopulated return will contain correct and complete information. Taxpayers are advised to check theirs carefully. Image: Getty Images

The South African Revenue Service (Sars) has already started alerting around 3.5 million taxpayers that they have been selected for an auto-assessment by sending them an SMS.

While such taxpayers do not need complete a tax return because Sars will have done that for them, they still need to ‘file’ the return.

To this end, the SMS directs them to the Sars eFiling platform or MobiApp, where they must either ‘Accept’ or ‘Edit’ the auto-assessment.

This must be done on or before Tuesday, November 23 for non-provisional taxpayers. The deadline for provisional taxpayers is January 31, 2022.

If a taxpayer misses this deadline, they will receive an ‘estimated assessment’, which is in fact a final assessment.

The Sars website states that an estimated assessment will only be issued after January 31, 2022.

However, several taxpayers were left confused recently when they received an SMS notifying them of their estimated assessment. Sars has issued a statement to all tax practitioners as well as the affected taxpayers in this regard.

Taxpayers should familiarise themselves with the process.

Read:

The process

The auto-assessment process was launched last year and is in essence an assessment based on data collected from employers and third party data providers. This include financial institutions, retirement funds and medical schemes.

Sars also uses information obtained from the national population register, companies register, deeds register, national vehicle register and other asset registers.

Sars Commissioner Edward Kieswetter said at the launch of the 2021 Filing Season that the revenue service has obtained 132 million data records this year from these providers. This is the equivalent of two terabytes of data.

This data is used to prepopulate the returns of selected taxpayers.

Accept or edit

Beatrie Gouws, head of strategic development and stakeholder management at the South African Institute of Taxation (Sait), says taxpayers can accept the assessment or, if not happy with it, can change it by submitting an amended return.

In terms of the process taxpayers should view their assessment on their eFiling profile or MobiApp and then decide whether to accept it or to edit it if they have additional information, or if they do not agree with the assessment.

Taxpayers with specific travel, medical or business-related expenses that Sars is not aware of should indicate the expenses on the edited return.

Taxpayers can schedule a virtual appointment with a Sars officer to assist with the process (branch offices are currently closed for walk-ins due to the current Covid-19 restrictions).

Several tax practitioners have cautioned taxpayers to make sure they understand their assessment before accepting it.

Sait says there is no guarantee that the auto-assessment is based on correct and complete information. “It remains the responsibility of the taxpayer to ensure that all the information reported in their tax return is correct.”

According to Gouws taxpayers will this year be able to see the information on which the assessment is based.

Sait suggests that taxpayers who are unfamiliar with interpreting the return should contact the Sars contact centre to assist them in assessing the assessment.

If a taxpayer fails to respond by either accepting the auto-assessment or submitting an edited return with the correct information, Sars can issue an estimated assessment if the submission deadline is missed.

“The principle with an estimated assessment is that the tax return remains outstanding. Sars can levy a monthly administrative penalty for as long as the return remains outstanding.”

Gouws says they have not seen this happening in practice, perhaps because the process is quite new and Sars is allowing some leeway for people to get acquainted with it.

Estimated assessments

In terms of the process Sars will issue an estimated assessment where a taxpayer does not submit their tax return on time.

In other words, where the taxpayer does not ‘accept’ or ‘edit’ their auto-assessment, Sars will again do the necessary for them.

Despite Sars having issued the estimated assessment, the taxpayer is still obliged to submit a tax return (either by accepting the assessment or submitting a true and full return).

Sait notes that once the taxpayer receives an estimated assessment they cannot object or appeal against it unless and until the outstanding return has been submitted.

“The taxpayer has 40 business days from the date of assessment to submit the return and access the right to request a reduced or additional assessment.”

Gouws says after a manual review of the return, Sars may either accept or reject it. Only once the return has been rejected are taxpayers allowed to object.

Collection process

When taxpayers have received an estimated assessment and still do not submit a return requesting a reduced or amended assessment, Sars may start its collection process.

Taxpayers who do submit the return (within the 40 business days), are advised to request a suspension of payment since the manual intervention can take a while. Sars has not committed to a specific turnaround time. This could result in the payment-due date lapsing and Sars will start its collection process.

If a request for suspension of payment is in place the collection steps must be put on hold.

The submission deadline for non-provisional taxpayers is November 23, and for provisional taxpayers it is January 31, 2022.

If a return is not submitted by these respective due dates, Sars can issue an estimated assessment.

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The pre-populated form is ok, but the tax wizard less so.

My daughter registered for the first time last year.

This year she has a tax free savings account (not) where she has apparently paid in the maximum. The form does not allow any changes or objections that we could find.

Still a ways to go.

Have you tried contacting the financial institution to correct the data they supplied SARS?

Ha ha you’re joking ? I went in to Nedbank and asked how do I know if my daughter saving account is actually or accidentally a tax free account.

Oh SARS gets it wrong all the time, just fix it on the auto assessment.

Which I cant do without paying an accountant.

For a nil return and as SARS seems to have not found her actual tax free savings account. We gave up.

The system does not allow any input from the taxpayer where data/documents from third parties are missing. Very frustrating where the taxpayer actually is in possession of the missing document.

Another disconcerting problem is that they want to audit my daughter who was unemployed for a few months and is owed a refund. How do you prove that you were unemployed? Only way I see is to send in copies of bank statements. This is really a bit sickening for young people to have to deal with.

doesent affect her taxable income ,albeit wrong .

There is a bit of confusion in this article.

“Despite Sars having issued the estimated assessment, the taxpayer is still obliged to submit a tax return (either by accepting the assessment or submitting a true and full return).”

If an auto-assessment is accurate and is not accepted by the deadline, the estimated assessment is the end of the matter for that year. Paragraph 3(3) at https://www.sars.gov.za/wp-content/uploads/Legal/SecLegis/LSec-TAdm-PN-2021-04-Notice-419-GG-44571-Notice-to-submit-returns-2021-14-May-2021.pdf.

If the auto-assessment is not accurate or the taxpayer was not offered auto-assessment, the quote is correct in that the taxpayer must still submit a true and full return.

Only a pity that when chosen for “auto-assessment” where you’ll have to choose between “accept” or “edit”, the e-Filing system does not allow you to access the “ITR12-return” (to view what is pre-populated & what figures/sources are taken into account).

So you’ll have to work by gut feel, or better first do your OWN calculations after you’ve gathered all your supporting tax documents.

Thus far, one can only view the ITR12-data after “accept” is pressed (or when you edit). Would be helpful to have access to the ITR12 BEFORE one needs to make a choice.

The auto assessment notice is intimidating and confusing.The edit function also also confusing. Should be accept or decline. SARS must give a much more user friendly explanation and notice.

Followed by an SMS that says : Dear Taxpayer (TaxNo: xxxxxxxxxx), This past weekend, SARS rolled out the systems in anticipation of the filing season that commences 1 July 2021. SARS has incorrectly raised an assessment based on the information we already have. If you are satisfied with this assessment, you do not have to do anything further. However, if you want to add to the information that SARS has, you may do so through a submission of a return on eFiling or MobiApp. It should be noted that in adding further information may result in you having to submit supporting documents to verify the information you added. We do apologise for any inconvenience caused. Regards, SARS

We submitted my friend’s tax return and found that SARS has already submitted her Estimated Assessment before the tax season even opened. The 26 of June 2021…
When we submitted a correction with the actual figures and logbook details , the estimated assessment was deducted from her refund. It was said that SARS does not submit the estimate so why are they deducting their estimates and call the Actual Submission a Reduced Assessment on the Statement of account. There is nowhere you can query this…

End of comments.

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