Honesty is the best policy!
| As you may be aware, SARS has made it public knowledge that they will be increasing the number of audits and tax verifications that they are doing this season. Meaning you have a higher chance of being requested to supply supporting documents for SARS to verify that what you submitted in your tax return was accurate and complete. The onus is on you, the taxpayer. If you can’t prove SARS wrong, they are deemed to be correct and may adjust your assessment (what you should pay) accordingly. If you don’t have supporting documents, SARS may not allow a deduction, or they may add to your taxable income, and you will be liable for higher amounts of tax payable. Should this happen, you may also be flagged by SARS for future return verifications. It is worth noting that the amount payable or receivable – no matter how small- is not a deterrent for verification/ audit. SARS is now using algorithms for audit and verification selections, or you may be selected for audit/ verification completely at random. For example, an algorithm could detect a significant change in your gross profit/ turnover/ net profit/ net assets from prior years and if it’s say, greater than x% you will automatically be selected – i.e. without human intervention. These algorithms are far more effective in detecting anomalies which would require explanations hence the increase in queries from SARS. Honesty and transparency in completing your returns will take you a long way! Remember SARS can go back to prior years and make adjustments so if they find discrepancies this year, they may reopen a prior year! I therefore urge you to make honest declarations, keep all your supporting documents (photocopy slips that fade), and make sufficient notes so that if 2022 is queried in 5 years’ time, you are still able to defend if need be! All the best! Thirusha 8 July 2022 Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice. |