Welcome to the latest edition of Tax Practitioner Connect, the electronic newsletter for tax practitioners that keeps you up to date with the tax matters that affect you.
Preparing for Individuals’ Personal Income Tax (PIT) and Trusts Filing Season 2021
In 2020, SARS embarked on a journey to integrate logical activities into phases that made up a filing season. This was, largely, part of the process to move the traditional Filing Season activities to become part of the business as usual standard operations of the organisation. Thus, we have integrated third party filing activities with individual filing returns to emphasise to parties involved in the process of each other’s responsibility and co-dependency. For example, without a successful employers’ third parties data filing, individuals cannot experience a seamless, fair and easy return filing.
SARS also annually embarks on enhancing systems and interaction points to improve efficiency to provide better service to the taxpayers in relation to the particular year of assessment. In this regard, the onset of the Covid-19 pandemic and the resultant lockdown levels last year, necessitated the turn towards more digital interaction channels. SARS, too, quickly re-aligned its processes and way of working to make it easy for taxpayers to comply with their tax obligations. Many of the services that taxpayers previously accessed physically are now available online and on digital platforms.
For the 2021 assessment year, SARS will continue to focus on the online and digital services that were introduced in the previous years. This Tax Practitioner’s Connect provides key information tax practitioners require to submit Personal and Trust Income Tax – and Trust Returns (ITR12) from 1 July 2021.
Filing Season 2021: Everything practitioners need to know
When does Individual & Trusts’ Filing Season open?
For the 2021 Filing Season, following dates and criteria are important:
- 1 July – More than three million taxpayers identified for auto-assessment will start receiving text messages indicating what they need to do to either accept or edit their auto-completed returns on eFiling by 23 November 2021.
- 1 July – 23 November: Non-provisional taxpayers who were not auto-assessed can file digitally using eFiling or the SARS MobiApp.
- 1 July – 23 November: Non-provisional taxpayers who were not auto-assessed and do not have access to digital services may be assisted at a branch by first making a booking. The online booking system is available here.
- 1 July 2021 – 31 January 2022: Provisional taxpayers can file via eFiling or the SARS MobiApp, and Trust can file via eFiling
Who must submit an Income Tax Return (ITR12)?
An individual does not need to submit a return if ALL of the criteria below are met:
- Her/his total salary for the year before tax (gross income) was not more than R500 000
- She/he only received employment income for the full year of assessment (March 2020 to February 2021) from one employer
- She/he has no car allowance/company car/ travel allowance or other income (e.g. interest or rental income); and
- She/he is not claiming tax related deductions (e.g. additional medical expenses that are not reflected on the medical certificate, retirement annuity contributions other than pension contributions made by your employer, travel).
Note that Trusts must also adhere to the requirements of Filing Season for individuals. That means Trusts must also submit their Income Tax returns between 1 July 2021 and 23 November 2021 via eFiling.
On the Personal Income Tax page click on “Do you need to submit a return” to determine whether a taxpayer needs to submit a return or not.
Tax practitioners urged to remind taxpayers they represent of their responsibilities
Tax practitioners play an important role in compliance. While SARS respects the right of taxpayers to obtain professional tax advice, SARS would like to emphasise the need for integrity in the relationship between a tax professional and a taxpayer, as this relationship is of utmost importance for tax compliance.
It is expected that tax practitioners, who are experts in this field, will:
- Clearly outline the tax laws and the obligations to the taxpayer
- Accurately and honestly assist taxpayers in the completion of their tax returns, and when appropriate, honestly and openly engage with SARS on behalf of taxpayers.
With Filing Season around the corner, SARS would like to appeal to tax practitioners who complete and submit ITR12s on behalf of clients, to remind their clients that it remains the responsibility of a taxpayer to make an accurate declaration. Furthermore, taxpayers, in their personal capacity, remain responsible for all payments, outstanding returns and penalties raised by SARS.
SARS has made tax compliance easy with auto assessments
In July, SARS will assess a significant number of individual non-provisional taxpayers by using the data received from employers and other third-party data providers.
This means that when SARS has received all third party data for a taxpayer, the data will be used to assess the taxpayer as well as provide the assessment result via an SMS.
What to do when an auto assessment SMS is received?
Upon receiving the SMS, a taxpayer has to check the information on the return using eFiling or the SARS MobiApp. If deemed correct, the assessment should be accepted.
Should there be a need to edit any information on the pre-populated return, the edits can be done using eFiling or the SARS MobiApp.
Failure to either accept or edit an auto-assessment during the period 1 July to 23 November 2021 will result in SARS raising an estimated assessment. This is a final assessment of the information about a taxpayer available to SARS. Should the taxpayer not agree, the dispute process will have to be followed.
Quick and convenient online self-service offering
There is no reason to queue! The Self Service Channels that can be accessed without calling or coming to a SARS office are:
- SARS MobiApp, and
- SARS’ Online Services.
Changing of banking details
Click on supporting documents for banking details on the Personal Income Tax page for a list of required supporting documents.
Submission of supporting documents
When SARS requests a taxpayer to submit supporting documents, for instance to verify banking details, they can be submitted via the following online channels:
- SARS Online Query System.
Booking of an appointment (eBooking)
Tax practitioners who wish to book an appointment can do so on the SARS website.
The eBooking system gives confirmation of a booking slot in real-time and provides a case number and a list of supporting documents that should be uploaded prior to the appointment.
With the online eBooking system, one also has the option of booking a virtual session with a SARS agent by means of a voice call.
Tax Type Transfers
- Practitioners are reminded that taxpayers or their appointed Registered Representatives are required to approve tax type activations/transfers
- Statuses of tax type requests will reflect on the eFiling profile under manage tax types
- Tax types which reflect “not available” are accompanied by a reason in the “info” button.
- Entities which require a Registered Representative to be appointed, can be requested on eFiling or SARS Online Query System.
Audit and Refund Status
- Audit status notices will be communicated via eFiling correspondence, e.g. supporting documents required, received, case assigned to an auditor.
- Refund status will be available on the taxpayer dashboard with an option to refresh.
General content to be included
SARS urges all practitioners to utilise the practitioner functionality at their disposal on eFiling and other online channels.
Please ensure all clients are added as taxpayers on practitioner profiles.
Home Office Deductions
Section 23(b) of the Income Tax Act states that a tax deduction for home office expenses is only allowed if:
- The room is regularly and exclusively used for the purposes of the taxpayer’s trade e.g. employment and is specifically equipped for that purpose. The home office must be set up solely for the purpose of working.
- The taxpayer’s remuneration is only salary, the duties are mainly performed in this part of the home. It therefore means you perform more than 50% of your duties in your home office.
- More than 50% of a taxpayer’s remuneration consists of commission or variable payments based on work performance, and more than 50% of those duties are performed outside of an office provided by your employer.
Complete details about what constitutes home office deductions, what the requirements are for claiming home office deductions, how to calculate the deductions, and where to claim the deductions on an Income Tax Return (ITR12) can be found here – Home Office Expenses.
It is important to note that any claim made by a taxpayer can affect the Capital Gains Tax calculations as far as the taxpayer’s primary residence is concerned.