Haven’t filed your tax returns in years? Read this…
Are you busy completing your tax returns? It’s important to complete your returns correctly or you will be liable for penalties from SARS. The penalties that you will be required to pay depend on the context of your omissions and the actions that you take. If you have outstanding returns from previous years, now is the time to get your tax up to date. Read our blog post and visit the SARS website to discover more about the consequences of outstanding tax returns.
What you need to do if you have unfiled tax returns
SARS and the National Prosecuting Authority are addressing the cases where tax returns have not been filed for extended periods. If you want to avoid prosecution, it’s advisable to submit your outstanding tax returns. E-filing is a convenient way to submit your tax returns. You can use this platform by going to the E-filing website and creating a profile. The “Returns Issued” tab on the website allows you to check for outstanding returns. It is possible that you have an outstanding return even if it doesn’t come up on this page. Check the results by selecting “Request Return” for the specific years that you are unsure about. Once you have identified the years that have outstanding returns, you can use this platform to submit them. You can keep track of your progress by using the “Returns History” tab. Once you’ve submitted all your returns, you may receive a non-compliance penalty. The SARS Correspondence tab allows you to check if there are any outstanding fees that you owe.
How much can you be fined if you don’t file your tax returns?
It’s vital to file your returns during tax season 2018 if you want to avoid paying additional penalties later on. The Understatement Penalty Regime means that you’ll be fined if you don’t submit your return or if you fail to pay the required amount of tax. Filing returns with incorrect statements or omissions can also incur additional costs. If you try to avoid paying tax, you could end up paying a fine that’s equivalent to 150% of the amount that you understated. The circumstances and actions of the taxpayer are taken into account when calculating the extent of the penalty. The penalties range from 10% for a substantial understatement to 150% for intentional tax avoidance. If you’ve received a penalty from SARS, it’s important to understand the different categories so that you can query the fine if necessary. Knowledge of each category helps you to understand whether you have been given the correct fine or not.
Failure to submit your tax returns can result in a criminal record
SARS has warned that failure to submit your tax returns could end up with you receiving a criminal record. SARS is working together with the National Prosecuting Authority to ensure that taxpayers will face the consequences of their non-compliance. The first conviction was made in Port Shepstone and SARS, as well as the NPA, will continue to prosecute non-compliant taxpayers. SARS added that not submitting VAT or tax returns is a criminal offence. SARS has reported an increase in non-compliance over the previous years that have led them to address this issue through criminal prosecution. At the end of March 2018, an estimated 30 million returns were owed to SARS.
Now that you know more about the consequences of not submitting your tax returns, you can use e-Filing to get your returns up-to-date. It is your duty as a taxpayer to ensure your tax returns are done timeously. Visit the SARS website or your nearest SARS branch for additional information.
For more information and tips on how to submit your tax returns, read our “Tax return tips and information for individuals in 2018” blog.