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Completed Tax Return for year, owe SARS

Posted 16 July 2015 under Tax Questions



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Lonce says:
2 July 2015 at 7:45

Was hoping you can assist filed my tax return yesterday and SARS is basically stating that I owe them R10,000 within in a year, I know this is untrue as every month I have been paying tax. I was a contractor for the last 10 months. Please advise if you able to assist as my tax return has already been submitted.

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TaxTimTaxTim says:
3 July 2015 at 15:16

We would require your SARS eFiling username and password to have a look at what the situation is. We would also require your IRP5.


Lonce says:
14 July 2015 at 8:28

I think I may have found the issue, the company has made a mistake with tax.

Employment period incorrect and start and end dates incorrect this could account for outstanding tax amount.

I spoke to Sars consultant and he mentioned I can create a dispute if need be.
I was hoping you can assist on my behalf please advise what is the fee ?


TaxTimTaxTim says:
14 July 2015 at 16:51

Do you contribute to a medical aid or any retirement funds?


Lonce says:
14 July 2015 at 17:28

I do contribute but have not in that tax year.


TaxTimTaxTim says:
15 July 2015 at 15:37

The issue is that because you have worked for several companies and each company has been deducting tax based on their perception that this was the only income earned during the year. PAYE is worked out by multiplying the monthly income by 12 and then using the tax tables to work out the tax on that income and then divided by 12. The more you earn the more you pay therefore when you add up your incomes together this pushes you up a tax bracket and therefore often you are having to pay in money as the original PAYE deductions are too low.


Lonce says:
15 July 2015 at 16:18

Thanks for your reply so what does this mean for me, has the companies not captured my tax correctly?
Do I need to pay SARS the amount owed?


TaxTimTaxTim says:
16 July 2015 at 11:54

Yes unfortunately you do need to pay SARS. The companies did work this out correctly based on the information they had due to your income earned from them, just not the total income you earned from all employers that pushed you into a higher tax bracket.

For example:
Company A pays you R100,000 (they paid less than R174,551, so tax rate is 18%)
Company B pays you R90,000 (they also paid less than R174,551, so the tax rate is 18%)
However, together, company A and B paid you R190,000, this pushes you into the next tax bracket at a tax rate of 25%.
SARS wants to collect tax based on your real tax bracket.


Ludolph says:
16 July 2015 at 12:14

Is there a way to mitigate this in future?


TaxTimTaxTim says:
16 July 2015 at 20:20

You would need to apply for a tax directive from SARS per company and have them take off more PAYE each month then you will not be in this situation.


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