2022's Tax Season Changes!

It's that time of the year again!

If you have been in the working world for some time and are familiar with SARS and Filing your own taxes yearly, you may be aware of the auto-assessment process that was introduced in 2019 for tax filing, and which has now been expanded upon.

The 2022 Tax Filing Season is bringing some additional changes to this system that you may not be aware of, and that may cost you if not acted on swiftly.

If, like many young professionals, you are new to all things 'Tax' - well, that's why we are here to give you the run-down on it all!

SARS Auto-Assessment - what does it mean?

SARS has significantly enhanced its use of technology and data in the last few years to make it easier for tax-payers to file their returns, to keep up to date and comply with their legal obligations, and to remove the need to physically travel to a SARS branch to file their returns. These systems are also helping SARS to efficiently hone down on those who are non-compliant and/or tax-dodging.

Last year (2021), a selection of non-provisional tax-payers were chosen to receive an auto-assessment compiled by SARS. These candidates could either Accept or Decline their assessment based on their satisfaction with the outcome, and the administration and hassle of filing their own tax returns was taken away from individuals that accepted these auto-assessments.

It is important to note that not all tax-payers will receive auto-assessments, and if you qualify and are chosen for one, you will be notified by SARS accordingly.

It seems that for the moment SARS has selected individuals that are easier to monitor and assess to start this process, such as individuals who receive only one income and who are not independent contractors. Accordingly, auto-assessments are not being compiled or issued for companies or trusts as yet.

This year (2022), there has been an adjustment to this system that excludes the option to 'Accept' your auto-assessment!

This means that individuals who find errors within or are not happy with the return on their auto-assessments will have to file their own returns or apply for an extension within 40 working days of receiving their auto-assessments. If not done, SARS assumes acceptance by the tax-payer, and your tax return will be finalised based on their assessment (unless you are able to provide 'exceptional circumstances' for not applying for an extension earlier!). With this in mind, it is very important that if you are selected for auto-assessment, you review yours as soon as you receive it, and that you immediately take the necessary action if you are not satisfied with your return.

What should I look for in my Auto-Assessment?

For those tax-payers who are chosen for auto-assessments, it is not the best idea to blindly accept the assessment based on SARS' understanding of your income. This is because SARS may not have received all of your tax certificates as yet, or even have your most current tax certificates on hand at the time of compiling these assessments.

This presents the possibility of you paying more tax than you truly owe. The auto-assessment is also fully compiled using third-party information and therefore does not include certain deductions, such as personally paid retirement annuity contributions, medical or travel expenses, donations, and wear & tear - among others. The exclusion of these more personal expenses also mean that you may end up paying more tax than is necessary, whereas filing your own returns allows you to include all of your possible deductions, which means that you will pay less tax, as well as benefit from a higher chance at receiving a tax refund (and a larger one, at that).

Is it important to Review my Auto-Assessment?

If you hadn't figured it out already - YES!

The most important thing to note about these auto-assessments is that additional income is not accounted for. This includes foreign investment (or any foreign) income, capital gains, and rental income (or loss). If your auto-assessment is inaccurate, and is missing a form of income or any expense/s, it is still your responsibility to declare such, or suffer the consequences of a penalty or legal action taken by SARS. The discovery of their own omission could lead to a 200% penalty on the excluded tax payable - as well as the interest on that tax that will also be payable by you.

With this in mind, it is especially crucial that one reviews their auto-assessment for any missing forms of income, and to immediately rectify and declare these to SARS - rejecting your auto-assessment and filing your own returns going forward if there are any omissions.

Important Dates

The Tax Filing dates for those who have not received auto-assessments are as follows:

• Non-provisional Tax-Payers can file a return until the deadline of 24 October 2022. (remember - if you have received an auto-assessment, this does NOT apply, and you only have 40 working days from the date you received your assessment to do so!)

• Provisional Tax-Payers and Trust Submissions can file their returns up until 23 January 2023.

How can Finpas Help You?

If you are unsatisfied with or unsure of how to adequately review your auto-assessment issued by SARS, our tax consultant can help you to take the steps that you need towards understanding and maximising your tax returns.

Besides auto-assessments, our advisers can also take a look at your overall finances and give you a breakdown of how you may maximise your future tax savings. We may not be able to change your past, but we can definitely improve your future by making it more

tax-efficient!

Contact Us to Get your Tax Savings today!