FAQ - 27 January 2016
27 January 2016
Posted by: Author: SAIT Technical
Author: SAIT Technical
1. How does an employee submit a return if the
employer did not provide an IRP5?
Q: A taxpayer was instructed by
SARS to submit an outstanding tax return for 2009. The employee worked at 3
different employers. The third and last employer did not complete IRP5's for
the 2009 tax year. The company has since dissolved. The employee has payslips
for 3 of the 4 months they worked for the company that show that PAYE was
deducted. How do we declare this income and PAYE that was paid on the IT12? He
also had a travel allowance and we have a logbook to that effect.
A: With regard to the 2009 year
of assessment and the fact that the employer didn’t provide the employee with
an IRP5, and presumably also didn’t submit reconciliation to SARS, the position
is that the employee will still have to declare the income on his or her return
(ITR12). It is the current SARS practice
to allow a deduction, as a bad debt, the employees’ tax withheld by the
employer, but not paid over to SARS.
They however, give no credit for this tax on assessment. We are not aware that any person was
successful in challenging this.
payslips show a travel allowance you must capture the total of that amount on
the ITR12 (you will be creating an IRP5 from scratch as there isn’t one) and the
deduction can then be made.
employer did submit reconciliation, SARS would be able to provide the taxpayer
with that detail or it could lead to a request for supporting documents.
2. What can a taxpayer do if SARS has not
completed an audit within 30 working days?
has 30 working days, according to them, after review material was submitted to
complete an assessment/audit or review. Is this correct? What is our client’s right if SARS have not
completed the assessment/audit or review within the 30 working days?
note that there is a difference between the SARS Service Charter (which is
SARS’ own service level agreement put in place to provide measurable service)
and the Tax Administration Act.
To clarify –
The SARS Service Charter, which is currently being redrafted, is
not enforced by any law and is merely a way of SARS measuring their own
outputs. This is where you might have heard that an Operations Audit (or
verification) can take up to 30 working days to finalise while an Enforcement
Audit can take between 30 days up until 12 months to finalise.
taxpayer’s only recourse at this stage is to log a case at the call centre once
the turn-around-time has expired. If your case is escalated at the call
centre, and after 21 working days you receive no feedback, you’re then able to
raise the issue with the Complaints Management Office (CMO) by submitting a
CM01 on eFiling (for more information see this link: http://www.sars.gov.za/Contact/How-Do-I/Pages/Lodge%20a%20complaint.aspx ).
If you’re still dissatisfied with the outcome, one would then take the issue to
the Tax Ombud by completing an OTO-01 form (http://www.taxombud.gov.za/Documents/complaint-form.pdf ).
We attended a presentation with the Office of the Tax Ombud last
year and the SARS Service Charter was mentioned:
"……there is a Draft Service Charter,
which is on the table with the executive committee of SARS. The Service Charter
had to be redrafted, as the old charter didn’t keep up with technological
developments. Previously, SARS may have undertaken to issue a tax clearance
certificate after 21 days, but with new systems and technology this has to
change as it is now able to issue a certificate within a period of three or
four days. SARS is in the process of
finalising the charter, which will be published on its website in due course.”
If we look at the Tax
Administration Act, the only mention of days in relation to an audit is in
section 42 where it states that:
1. A SARS official involved in or responsible for an audit under this Chapter must, in the form and in the manner as may be prescribed by the Commissioner by public notice, provide the taxpayer with a report indicating the stage of completion of the audit.
2. Upon conclusion of the audit or a criminal investigation, and where -
Disclaimer: Nothing in these queries and answers 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 answers, SAIT do not accept any responsibility for consequences of decisions taken based on these queries and answers. It remains your own responsibility to consult the relevant primary resources when taking a decision.
a) the audit or investigation was inconclusive, SARS must inform the taxpayer accordingly within 21 business days; or
b) the audit identified potential adjustments of a material nature, SARS must within 21 business days, or the further period that may be required based on the complexities of the audit, provide the taxpayer with a document containing the outcome of the audit, including the grounds for the proposed assessment or decision referred to in section 104(2).