SARS penalties for late tax certificates
TIME RUNNING OUT FOR COMPANY PAYE RECONCILIATION SUBMISSIONS. Companies have little more than a month to submit their annual PAYE reconciliations to the South African Revenue Services (SARS) and if they don’t make the deadline they will pay penalties.
The PAYE reconciliatioin submission season began on 4 April and closes on 3 June 2011. SARS has warned employers that they will be penalised if tax certificates are not submitted by the 3 June deadline. "Penalties will also be applied to incomplete tax certificate submissions where some certificates are missing or do not contain all the mandatory information such as income tax reference numbers or if inaccurate tax certificates are submitted,” says Grant Lloyd, managing director of payroll and HR software specialist Softline Pastel Payroll, part of the Softline Group (www.pastelpayroll.co.za) and Sage Group plc.
A SARS notice stipulates that the penalty will be calculated as 10% of the company’s total tax liability according to EMP201 returns submitted for the full 2010/2011 tax year. Penalties will be raised only after the conclusion of the filing season on 3 June 2011.
“However, employers will be able to request a remittance (RFR) of the penalty amount and provide proof that their failure to comply was the result of circumstances beyond their control,” said Lloyd. “Should an RFR be received, SARS will reduce the penalty by charging a 1% penalty for each month the submission is late. So if the submission is one month late the 10% penalty reduces to 1% and if it is three months late to 3%.”
When submissions are incomplete or inaccurate, only the offending tax certificates will be included when the penalty is calculated. Lloyd adds that employers can expect leniency from SARS if they can provide proof that they have done everything within their power to submit complete tax certificates on time.
“Any penalties unpaid after three months will be recovered by SARS through the ITA88 Agent Appointment Notifications process introduced a few months ago that appoints companies as agents and obligates them to collect outstanding penalties from employees and pay the amounts over to SARS using the e@syFile software system. Now, to recover unpaid penalties after three months, the employer’s bank will be appointed as an agent allowing SARS to recover unpaid amounts directly from the employer’s bank account.”
Lloyd also stressed that companies must ensure that they download the latest version of the SARS e@syFile™ Employer software from the SARS website www.sarsefiling.co.za seeing that the new software will ensure accuracy and compliance with SARS requirements.