Don’t delay – SARS will make you pay
SARS is continuing its current campaign to ensure 100% tax compliance from businesses and part of this initiative is a shorter submission window for the 2022 tax year.
The revenue service has also announced a number of penalties for late submission of Corporate Income Tax (CIT) returns and VAT filings. This means that your business may be caught by surprise if it misses a deadline – and the fines can be hefty.
If your taxes still aren’t ready to be filed, an outsourced accounting and bookkeeping solution may be the ideal way to ensure compliance and avoid fines.
Here are some things to bear in mind as you approach the 2022 tax filing season.
File on time or face the penalties
With the commitment to modernising its service offerings SARS is making it easier for companies like yours to pay taxes – but the penalties for non-compliance are also becoming more severe.
In principle, companies have 12 months from the end of their financial year to file company tax returns. Individuals who pay provisional taxes, including trusts have until January 23, 2023, to file if they use e-filing.
Should a company or individual fail to file returns on or before the deadline, a non-compliance administrative penalty, levied under Section 210 of the Tax Administration Act, may apply.
A non-compliance penalty can be a fixed amount from R250 – R16 000 / month, imposed until such time as the outstanding returns are submitted. The non-compliance admin penalty is based on the taxpayer’s taxable income or assessed loss.
It’s advisable to submit the outstanding returns regardless of whether you agree with the penalty, and a Request for Remission form can be submitted to SARS in writing.
The following percentage-based penalties may apply:
- 10% penalty for not filing and/or paying a VAT return (VAT201) on time
- 10% penalty for not filing and/or paying employee tax returns (EMP201) on time
- 10% penalty for late filing and/or paying of provisional tax returns (IRP6)
- 20% penalty for inaccurate provisional tax returns
The most severe penalty is applied to companies that understate their taxable income and ranges between 5% and 200%.
This could translate to a fine starting from tens of thousands and maxing out in the millions, depending on the size of your business.
Switch to outsourced accounting for a stress-free tax season
The increasing complexity of South African tax laws and the heavy penalties associated with non-compliance are making it increasingly risky for entrepreneurs to handle their own tax submissions.
Bletchleys team of experience accounting professionals is on hand to assist you with all aspects of tax preparation and submission, in line with your company’s overall cost reduction strategy.