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How do I submit my tax return if my employer passed away and never gave me an IRP5?

24 June 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I was employed by a close corporation during the period 1 March 2014 until 28 February 2015. The owner passed away in December 2014. I requested an IRP5 and was told by the persons who took over the day to day operations that it is not their responsibility to give it to me.

I have printed all of my bank statements and payslips for the period and have cross referenced them to the payments received into my bank account. I also have a copy of his death certificate.

My Question: How should I submit my tax return this year? What proof should I send with it? Will I be liable to pay PAYE over to SARS if the cc did not pay what it had deducted from me to SARS? Or will SARS claim it from the estate? Whom should I ask for the IRP5?

A: Para 13(1) of the 4th Schedule to the Income Tax Act states that it is the employer’s responsibility to furnish an employee with an employees’ tax certificate (an IRP5).

Of course, the employer is an entity, but the member(s) of the CC would be the people ultimately responsible for making sure they comply with the tax law.

Note para 13(2) of the 4th Schedule:

"The employees’ tax certificate referred to in sub-paragraph (1) shall be delivered—

(a)    if the employer who is required to deliver the certificate has not ceased to be an employer in relation to the employee concerned, within 60 days after the end of the period to which the certificate relates;

(b)   if the said employer has ceased to be an employer in relation to the employee concerned but has continued to be an employer in relation to other employees, within fourteen days of the date on which he has so ceased; or

(c)    if the said employer has ceased to be an employer, within seven days of the date on which he has so ceased,”

Also not para 13(5):

"It shall be the duty of any employee or former employee who has not received an employees’ tax certificate within the time allowed by sub-paragraph (2) forthwith to apply to the employer for such certificate.”

You have to find out who did the accounting and tax compliance for the CC (was there an internal accountant or was this function outsourced to another company)?

Perhaps that person still managed to submit the PAYE returns (EMP201s) and EMP501s.

Just because you did not received an IRP5, it doesn’t automatically mean the accountant didn’t submit that IRP5 in advance to SARS.

Filing your return

Nevertheless, you can still submit your tax return for the 2015 tax year, but may encounter some challenges.

 

The first page of the ITR12 will ask you if you received an IRP5. You can try answering ‘yes’ and see if a completed IRP5 is automatically generated and shown in the return. If that doesn’t happen, your answer will be ‘no’.

The only place where I’ve found you can disclose your salary income for that employer is under ‘professional, business and trade income’.  In that section of the return, you’ll disclose your salary from that CC under ‘other’.

You’ll be assessed and the ITA34 will obviously not show PAYE which should have been deducted from your final tax liability. As a result, you’ll have to object and your objection must include a letter to SARS where you explain your circumstances for why you never got an IRP5 from the CC. You’ll also attach the payslips as proof that the CC did in fact deduct PAYE from your salary.

This usually works.

With regards to your question about you being liable for the PAYE the CC never paid over to SARS, please see the following link for a similar question we once answered:

https://sait.site-ym.com/news/226684/Can-SARS-recover-PAYE-from-an-employee-if-his-employer-never-paid-it-.htm

Extra information

Furthermore, before you ask us anything in future, I would urge you to go visit www.thesait.org.za/news . This webpage is titled "news and press”. Once there, there is a drop-down menu next to the phrase ‘Filter news by category’. The drop down menu is handy as it allows you to look through categories like ‘case law’, ‘transfer pricing and international tax’, ‘Institute Announcements’ and ‘VAT’. Choose the last 2 categories at the bottom, titled ‘SARS operational and eFiling questions’ and ‘technical and tax law questions’ respectively.

You will find there a lot of questions we have been asked by members and the answers we provided.

It’s a valuable resource.

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


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