Should you find yourself in a situation of unexpectedly owing SARS monies, it is useful to know what your options are in terms of how to approach SARS and deal with the funds outstanding:
- Assessment
This is the first notification from SARS of funds due by the taxpayer and bears a due date by which the funds due are due to be paid to SARS. SARS follows up with courtesy reminders of the funds due, this is communicated by SMS as well as other means. Payment of the full amount outstanding by the due date provided by SARS ensures that no further interest and/or penalties are levied against the taxpayer.
- Past due reminders
Once the due date has passed, SARS continues the reminder notification process, but the tax status of the taxpayer changes to “non-compliant”. This is significant for several reasons, including income tax clearance, which is cannot be provided while the taxpayer remains in that status. Should you be unable to pay the amount outstanding, remedial actions available to you include a request to SARS to defer payment, request a suspension of payment in order to lodge a dispute, or formally request SARS for a compromise.
- Notice of Final Demand
Should you fail to settle the debt due to SARS without requesting any of the available remedial opportunities, SARS issues a notice of final demand. Once this step has been taken, SARS may appoint a 3rd party to collect the outstanding funds from the taxpayer and pay it to SARS on its behalf. 3rd Parties include the taxpayer’s employer or its banking institution. 3rd Parties appointed by SARS are legally required to comply with SARS’ order in this regard. Additional collection mechanisms available to SARS include taking judgement against the taxpayer, blacklisting the taxpayer as well as attaching and liquidating the taxpayer’s assets.
In conclusion:
- As a taxpayer, you should always ensure that your taxation liabilities due to SARS are paid on time, to avoid interest and/or penalties being raised by SARS.
- Ensure that your contact details with SARS are up to date to ensure that SARS’ notifications reach you.
- Should you not be in the position to pay your SARS debts on time, timeously trigger the remedial mechanisms available to you. The SARS website lists contact information for taxpayers wishing to contact them.
To ensure that you do not find yourself in a position where SARS is seeking funds from you, hiring a professional income tax consultant is strongly encouraged. The MMS Group is a SARS registered tax practitioner and in our capacity as such, we act for taxpayers committed to income tax compliance. Contact our team of tax experts if you wish to assure your compliance status with SARS.
Related Articles
Why avoiding SARS Penalties and Interest is so important
SARS is known to levy heavy penalties for non-compliance where underestimated and late income tax payments are concerned. Interest is also imposed on taxpayers until their outstanding...
Provisional tax implications of ceasing to be a tax resident in South Africa
Due to the recent changes made to the tax residency rules in South Africa, it may be wise for individuals looking to emigrate to confer with their tax consultant on the possible need to...
ABC of the Income Tax deduction for Home Office Costs
With the rapid change many businesses made to their working environments, shifting their employees to work from home, individual taxpayers are increasingly seeking clarification on...
Let us assist you with:
Contact Us