Keeping your business tax compliant is vitally important if you don’t want to face heavy fines and penalties from SARS. That’s why, if you currently find yourself in a situation where you’re behind on your returns and payments, it’s best to address it as soon as possible to minimise the fall out. We’ve outlined a few of the most common scenarios and solutions so you know how to get your business’ tax affairs back on track.
How to find out if you owe SARS money
If you have submitted your tax return to SARS, but you’re not sure whether you owe them any money, you can easily check on your eFiling profile. Here you will see how much you, and by when. Or, if you’re lucky, they might find they’re giving you a refund.
Here’s where you can find what you need to know:
1. Refund amount and due date (owed to you by SARS)
If you are due a refund from the South African Revenue Services, both the refund amount and refund payment date can be viewed in the ‘Income Tax Statement of Account, also known as the ITSA. The refund date that is displayed next to ‘Electronic refund’ and the amount displayed in the ‘Transaction value’ column, is the date and the amount that will be paid into your bank account that is linked with your eFiling profile.
2. Payment amount and date for the amount owed by you to SARS
If you are looking for the due date of when a payment needs to be submitted by your business to SARS, you will be able to view this due date in the ‘Notice of Assessment’ section, also known as ITA34. The payment due date is displayed under ‘Details’ on the ITA34.
What happens if you pay SARS late?
This is something you want to avoid at all costs because, well, it’ll cost you. If you fail to pay SARS on time, you will be penalised. The non-compliance penalty for the failure to submit a return is a fixed amount penalty which is based on your taxable income and can range anywhere from R250 to R16 000 per month for as long as you remain non-compliant. To avoid these costly penalties, it’s important to ensure that your accounting is up to date and that your tax returns and payments are done on time.
When are penalties imposed?
Penalties are imposed when a taxpayer is found guilty of non-compliance under the Tax Act. Fixed amount penalties are imposed for any outstanding returns or if an individual or business is found to have not disclosed any information that should be known. A penalty is then levied as a percentage of the payment that is received late. In order to ensure that a payment is made on time, it is important to note that the amount owed needs to reflect in the South African Revenue Services bank account before the due date. Therefore, it is crucial to make sure that you do not do this at the last minute. If a payment is received in the SARS bank account after the due date, this will automatically be regarded as a late payment. If your payment date happens to fall on a weekend day, such as a Saturday or Sunday, or even a public holiday, the payment either needs to be made on the Friday before the weekend, or the day before the public holiday.
How long do you have to pay back SARS?
If you happen to owe any money to SARS, you need to view your due date on your eFiling account. Normally eFilers payment due dates for their tax returns are 31 January, whilst manual payments at a SARS branch need to be made by the end of the
next month from the assessment date.
If you’re behind with your returns or payments, this is how we can help
These are the two most common scenarios you may find yourself in. But don’t stress, we can assist whatever the situation. There is a solution for every tax problem, and we can help you resolve it.
If you have found yourself in a situation where you have not submitted any information to SARS, then they don’t know anything, yet. However, you need to get everything in order as soon as possible so that you can submit all the correct documentation. The further behind you fall, the harder it is to sort out, and the more penalties to you may incur. Our team can assist you in consolidating all the necessary documents, filing your tax return. Based on the outcome of your submission, we can help take the necessary steps to address the situation. We’ve outlined the possible options further down in the article.
You’ve submitted your return to SARS, and you own them money. If you haven’t paid yet and you cannot afford the lump sum payment, you have one of two options.
Option 1: A payment arrangement
A payment arrangement can be worked out with SARS. It is quite a document intensive process, and you will need to show them the affordability and potential income of the business. An example of a payment arrangement with SARS is paying 40% of the amount due upfront, and then paying off the rest of the amount owed, in monthly instalments.
Option 2: A compromise with SARS
When asking SARS for a compromise, it means that you can offer SARS a portion of the money owed, and then ask them to write off the rest of the amount due. However, in order to do this, the owner of the business will need to show that they have been funding the loss, not causing it. You will need to show balance sheets, income statements and various other forms of documentation in order for SARS to agree to a compromise. An important thing to note is that if you default on the compromise made with SARS, the compromise will be cancelled, and you will be liable for the entire amount.
Being behind with tax returns and payments to SARS can be quite a stressful situation to find yourself in. But there is always a way to sort it out, and the sooner you tackle the problem, the better it will be for you and your business.
If you need help sorting out your business’ tax situation, contact Cloudworx today and
let us assist in finding the best solution.