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Has Sars disallowed your medical expense claim?

This may be why.
Sars is trying to close the gap of potential abuse with regard to medical expense claims, a tax practitioner says. Picture: Shutterstock

Tax practitioners have been caught by surprise after the South African Revenue Service (Sars) disallowed medical expense claims due to failure to submit the correct supporting documents.

Wessie van der Westhuizen, partner at Willems & Van der Westhuizen, explains that medical tax certificates usually distinguish between contributions paid during the tax year and “claims not recovered from the scheme”.

Previously, Sars generally allowed a medical tax credit for “claims not recovered from the scheme” when individuals submitted their tax returns, but this year their experience has been that this credit is only allowed if taxpayers submit all the invoices and receipts related to the amount reflected on the certificate as well, he says.

While this is not an issue where taxpayers don’t have large medical expenses, it is a significant concern for some pensioners and taxpayers with disabilities in particular. In some instances, it can be the difference between a refund and having to settle a tax debt, he says.

Van der Westhuizen says taxpayers sometimes submit these invoices and the relevant proof of payment to their medical schemes and may not be able to retrieve these supporting documents for submission to Sars.

Independent personal tax specialist Bari Duvenhage says while Sars previously regarded the medical aid tax certificate as sufficient proof of claims not recovered by the scheme, there has been a sudden change in approach and it now also requires proof of payment.

Yet this is generally only an issue in selected cases where medical expenses are quite high. Taxpayers need to meet certain criteria and won’t necessarily be able to claim for every cent they paid towards medical expenses, she adds.

Ettiene Retief, chair of the national tax committee of the South African Institute of Professional Accountants, says he is aware that certain practitioners have experienced this issue, but is not clear how common it is.

He says in the past, some taxpayers have abused the system with regard to qualifying medical expenditure. Sars has become more wary of medical expenditure and has started to consider whether a specific taxpayer truly paid the expense and if it qualifies as a medical expense in terms of the tax rules.

In certain cases, taxpayers have previously tried to claim for things like toothpaste or similar items.

“I think Sars is just trying to close that gap of potential abuse,” he says.

Sars did not respond to a request for comment by time of publication.

To allow more time for verification prior to the December holiday period, the 2018 tax season is shorter than usual. Non-provisional taxpayers (most individual taxpayers fall into this category) have to submit their returns by October 31.

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So, if it is not the Guptas and their ANC comrades stealing from the taxpayer, we now have SARS manipulating past rules as to rape the wallets of the taxpayer. Medical aids need to come to the rescue now of their members, and SARS should start trusting their members with clear records unless they want to happen to them what the tax payers did to Sanral – civil disobedience en masse. Tito Mbeweni, get involved here and make the tax payer your friend. This is a once off opportunity for yourself to fix what got broken on the last ministers watch.

Yes they are playing with the rules. My travel claim was disallowed because the logbook was not in the “new” format.

This is scraping the bottom of the tax barrel by sars screwing over the good guys to compensate for the grand klepto-ineptocracy of the anc gutterment. The average citizen obtains absolutely no benefit from paying taxes because this government has been their enemy not friend.

SARS is getting desperate. All the social programmes are expensive. And the looting too. Some suckers have to pay for it all.

Heybo SARS, please protect me from yourself!

This was exactly my experience in the previous tax year.
I subsequently discovered that pharmacies and doctors are able and willing to provide records of payments for the tax year. So you don’t have to keep all the slips and add them up for tax submission purposes. Good news!

The reason given by sars that people abuse the annual tax certificate submission is poppycock. Since the source Of such certificates is invariably medical schemes, the incidents of abuse are minimal. In typical anc fashion the honest get screwed over because of their criminal brethren

I’ve lost ALL trust in SARS. They’ve become the collectors for a corrupt Government and corrupt system. I’m not surprised with their attitude as to medical claims. As reported on 18/10/2018 members of medical schemes had paid R32,6 miljard out of their pocket for “expenses” not “covered” by their medical aids. Every South African who’s a member of a medical aid and being taken to the cleaners by them, should and must have the right to re-claim the medical expenses as tax deduction.

Agreed. This should be taken to court to ensure fair treatment

Please can this guy explain which medical aid accepted and declined a medical claim for toothpaste?

SARS seems to apply rules as they see fit, surely a medical aid statement is sufficient and taking the load off of SARS capacity to audit millions of medical invoices. Seems dumb.

as you said very, very, very, dumb

If they decline it, would it appear on tax certificate?

Precisely my experience this year !!! I copied all Docs , used the Post Office to send via registered mail , which of course 3 weeks later had not arrived at SARS , but eventually did . Absolute beurocratic Hogwash chasing Pensioners around for basically no logical reason. The amount of money involved in Minimal !!! No wonder SARS is Battling !!!

To add to the above , I omitted to state that I had also driven into SARS to hand deliver the Docs and was advised that the drop off boxes no longer operate and that I should join the Q of about 70 !!! TO DROP OFF AN ENVELOPE !!!~

I intend to test the SARS system by going to the local office and handing in the documents to the supervisor/employee. I will not stand in a Q as the Income Tax Act to my knowledge requires you to submit your return to the SARS Branch and handing it to an employee is submitting in my opinion. If that employee refuses to accept, I will simply leave it there as I have done what the Act requires.

Via e-filing you can lodge an objection or a dispute. Let’s see how the commission earners are dealt with when the system is overloaded with comeback from most taxpayers.

Vexatious interference with the taxman is going to have unpleasant consequences.

SARS is really very very desperate – I can understand that they would like to see an invoice or voucher if I claim say R80 0000 self paid medical expenses(claim not even sent to my medical aid)in 1 year. This year just 2 hearing aid systems R40 000 each self paid – but for small amounts claimed please don’t be so desperate for tax that the paperwork (copies etc) and lost working hours are in monetary value more than what SARS would get more in the form of tax. Another thing to keep in mind: with the medical expenses formula (differs for people younger than 65) still just forms a fraction of actual medical expenses spent claimable for tax purposes – the higher one’s taxable income, the lesser the government is concerned about one’s medical health in tax terms. I can imagine some employee at SARS got promotion for this brilliant non-productive idea.

I’ve personally experienced this and it’s extremely annoying. SARS does not seem to understand that if your Medical Aid refused to pay a portion of medical bill (in most cases the Medical Aid pays a portion of the bill), YOU would have to pay it. The service provider would not simply ignore the outstanding amount. The fact that it was submitted to and declined by your medical aid should be sufficient evidence. My medical aid receives ALL the accounts directly from the service providers – I don’t even get to SEE them, let alone have copies of them. If a portion is declined by the Medical Aid, I simply pay it – usually via eft – to the service provider. I rarely receive copies of the accounts in return and until now haven’t bothered requesting them as the Medical Aid keeps the records. SARS has, once again, created a very complex problem out of a simple one. I wonder if this sort of nonsense will change once Moyane has been permanently replaced. . . We live in HOPE. .

Fully agree!

A complex mess has been created, out what could’ve been a simple matter.

Another big issue, is the the Medical Aids DO NOT RECORD all the refused claims, which are self-funded. (And these are all either prescribed meds…or doctor’s accounts or hospital bills….all allowed into the count).

Non-prescribed meds are obviously not tax claimable, and left out of the equasion.

If medical aids can record ALL valid claims that was refused during claims-processing state, on their respective tax certs, the better. I have personally seen people with (prescribed) and other valid self-funded medical bills in excess of the tax-certificate figure….why did the medical aid not record it?…assuming it went through their claims system.

I always advise people to claim an expense to your med aid scheme, even if you know it will be declined…just state on it “for tax certificate records”.

Hence part of the problem is with medical aid administration.

I agree with all the comments submitted. To add to the complexity of this problem, SARS only allow 20 documents to be submitted on eFiling and these are limited to 2MB. The taxpayer required to submit numerous receipts etc for medical claims is therefore unable to do so and must trek into an office. To reiterate other comments, the “Medical expenses paid by you” code 4020 as stated by the medical aid is a legitimate amount otherwise why would SARS require medical aids to provide it. Service providers are excellent at chasing these accounts and so the chances are they have been paid. This whole affair is ridiculous.

A client went to SARS a few weeks ago with 65 pages of vouchers, wait for more than 2 hours, when it was her turn to hand in the vouchers (SARS puts it through their automatic /self feeding copy machines – suppose that’s why it must be in A4 size only) the excuse was the department was not open / available at that stage – please come next week. It is so typical government style, tomorrow is another day, simply not capable to get to grip with the term:”time is money” – costing her a day’s leave – worst part: the end results of the so called “audit” by SARS had no changes at all – more time and money wasted.

The file limit this year was increased from 2MB to 5 MB wef for submissions of 2018 tax year

Their desperate attempt at recovering losses is really pathetic, unjust, and so unethical! For the first time this year my travel expense claim was rejected on the basis that supporating docs were required from my employer. The letter needed to state that the company vehicle I used was a tool of trade and used for business. How absurd is that! My IRP5 states that I am a sales rep and also the company car benefit is listed in there. After a long wait (6 weeks) while they audited me, Sars provide feedback that they are no longer owing me R14k but that I owe them R5k. I went in to their local office to enquire further. Was told that there was a missing column on my logbook where I need to state my reasons for travel??? I was shocked by this response as my logbook clearly highlights business and private km’s travelled. When I tried to explain to the Sars consultant that as a replacement, all I do is see clientsome so what was it that they wanted me to declare. She responded so arrogantly that I still needed to state on the missing that I’ve been visiting clients. I pushed back because the thought of leaving Sars and having to queue up again the next day was daunting. Ultimately she uploaded my documents and advised that my objection would take 60 working days to be resolved! I’m not holding my breath for my claim, as I can already foresee that they will give me more excuses NOT to pay me.

There is a small window for abuse: if people submit all sorts of nonsense to medical schemes, so it can appear on tax certificates, but it’s unlikely to be very common.

End of comments.





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