We both recognise the fear that surfaces when facing the daunting task of filing tax returns for SARS. It feels like taking on a significant challenge where time disappears, and paperwork seems endless.
While managing your business, organizing all the necessary documents and reviewing numerous financial reports can seem overwhelming. Moreover, South Africa’s intricate tax laws can confuse even the most committed business owner.
But don’t worry; we’ve got your back. This month’s blog post identifies the most common errors South African entrepreneurs make when filing tax returns with SARS. Here are some mistakes to watch out for:
1. Submission of Incorrect Declarations
One of the most common errors that business owners make when submitting tax returns is underestimating their income or overestimating their expenses. This can lead to incorrect declarations being submitted to SARS, which can result in SARS raising an assessment. This, in turn, can lead to a dispute with SARS, which can be time-consuming and costly. To avoid this error, it is essential to ensure that all declarations are accurate and reflect the true financial position of the business.
2. Not Adhering to Prescribed Time Frames for Submitting Supporting Documents
Another common error that business owners make is failing to adhere to the prescribed time frames for submitting supporting documents. SARS requires businesses to submit supporting documents within a specified time frame, failure to do so can lead to the raising of assessments. To avoid this error, it is essential to ensure that all supporting documents are submitted within the prescribed time frame.
3. Capturing Incorrect Amounts in a Tax Return
When capturing amounts in a tax return, it is important to ensure that cents are excluded. This is because including cents can lead to incorrect figures being captured in return, which can lead to disputes. To avoid this error, it is essential to double-check all figures and ensure that cents are excluded.
4. Failure to Submit Tax Returns
SMMEs that fail to submit tax returns are imposed administrative penalties, which can be costly for the business. This can also lead to disputes with SARS, which can be time-consuming and costly. To avoid this error, it is essential to ensure that all tax returns are submitted on time.
5. Failure to Stipulate Exact Issues When Filing an Objection
When filing an objection against an assessment, it is essential to stipulate the exact issues that are being objected to and the legal grounds to support the objection. Failure to do so can result in the objection being invalidated, which can delay the objection process. To avoid this error, it is essential to ensure that all objections are clearly stated and supported by legal grounds.
Submitting tax returns to SARS can be a complex and time-consuming task. However, by avoiding common errors such as submission of incorrect declarations, failure to adhere to prescribed time frames for submitting supporting documents, capturing incorrect amounts in a return, failure to submit tax returns, and failure to stipulate exact issues when filing an objection, business owners can ensure that their tax returns are accurate and submitted on time. At MGT Accounting, we provide affordable tax solutions for businesses, ensuring that all tax returns are submitted accurately and on time. Contact us today at firstname.lastname@example.org to learn more.