Tax Season 2022 Now Open: Beware, This Year’s Deadlines are Shorter!

KESHO

Table of Contents

Tax Season 2022 began on July 1, 2022; here is a quick overview of who must submit, how they must submit, and when they must submit by: 

Who is not required to file? 

  • Individuals with a total annual gross income of less than R500,000 from a single source, with no other allowances or benefits, and from whom PAYE has been deducted in accordance with the prescribed tax deduction tables. 
  • Individuals who do not claim tax-related deductions or rebates such as medical expenses, travel, and retirement annuity contributions other than employer-made pension contributions. 
  • Individuals who only receive interest that is less than the interest exemption thresholds, amounts from tax-free savings accounts, or dividends. 
  • Individuals who are not residents for the entire year. 

 

Even if you appear to be exempt at first glance, you may benefit from filing a return due to your unique circumstances. Professional advice is required if there is any doubt. 

Issues requiring special attention

For provisional, non-provisional, manual, and branch office submissions, this year’s tax season is significantly shorter than last year! 

Last year, non-provisional taxpayers had until November 23rd, which was later extended to December 2nd at the last minute. The deadline this year is a month earlier, on October 24, 2022. 

Similarly, the deadline for provisional taxpayers is a week earlier, on January 23, 2023. That’s less than seven months away, including the December and January holiday periods. 

Home office expenseremain in the spotlight, as SARS denied more than 60% of home office claims last year. Check that you are eligible for this deduction and that it is calculated correctly for allowable non-capital expenses such as rates and taxes, electricity, repairs, and insurance. Deductions cannot be claimed for reimbursements or free equipment provided by an employer. Also, be aware of the potential capital gains tax consequences if you sell the home for which the deduction was claimed. Professional assistance is required here! 

More than three million taxpayers were auto-assessed last year, and many more will be this year. If you are auto-assessed, SARS will notify you via SMS that your tax return has been pre-populated by SARS on eFiling or the SARS MobiApp. Before making any auto-assessment decisions, consult with your accountant. 

Check if your auto-assessment is correct as soon as you receive the SMS notification, because there is no need to “accept” the assessment this year: SARS will consider it accepted unless changes are made as detailed below before the 24 October deadline. If you owe SARS money, the next step is to pay it through eFiling or the SARS MobiApp. If you are due a refund, ensure that your banking information with SARS is correct and simply wait for the refund.

 If you disagree with the automated assessment, you must file an accurate ITR12 tax return within 40 business days of the date of the auto assessment. If this return is not filed by October 24, it will be subject to late submission administrative penalties and interest. If SARS approves the changes, a lower or higher assessment will be issued. If not, the standard objection and appeal procedures apply. 

SARS has stated that Company Income Tax (CIT) filing compliance is currently a focus and urges companies to remember that registered companies that are required to file a return must do so on time and in full. 

Non-complianceis as expensive as ever, with the same auto-assessment penalty rules expected to apply for the 2022 filing season. The late submission administrative penalty ranges from R250 to R16,000 per month for up to 35 months, depending on the taxpayer’s assessed loss or taxable income for the year preceding the year being assessed. 

 Furthermore, failure to submit the return(s) within the prescribed time frame may result in a summons and/or criminal prosecution, with a fine or imprisonment for up to two years if convicted. 

Next Steps

Get started immediately

To avoid the last-minute rush and to reduce the possibility of errors and omissions, set aside time to attend to any potential issues, such as finding documents, obtaining third-party information, or seeking professional advice. 

Ensure all your information is correct

Update your personal information, such as banking information, address, and contact information, on eFiling or the SARS MobiApp, and ensure that all information on the return is correct. SARS’s ability to obtain information from third parties, such as employers, financial institutions, medical schemes, retirement annuity fund administrators, and other third-party data providers, has significantly improved, making it easier than ever for SARS to detect incorrect or undisclosed information. 

Check that you have received certificates and documents

Relevant in determining your tax obligations, such as IRP5/IT3(a)s and other tax certificates such as medical certificates, retirement annuity fund certificates, and other third-party data If not, contact the third-party data provider right away. 

Keep accurate records

Of all calculations and source documents used, as SARS may request verification and/or justification of the calculations. 

Consider professional assistance

To ensure that all exemptions, rebates, and deductions for businesses and individuals are included, as well as the numerous terms and conditions governing when and how these may be claimed, are met SARS refunded more than R17 billion to taxpayers last year. 

Plan ahead financially

In order to meet the deadline for filing and the upcoming tax liability