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Never submitted a tax return - what kind of tax penalties are there?



Hi Tim,

One of my family members has never submitted a tax return and only actually registered for tax about a year ago. He has been working for about 13 years. That being said, 4 of those 13 years he worked overseas (he worked on the cruise ships were he earned tips only), for 3 years he worked as a waiter where he earned cash and was paid a minimum wage and 5 years as a restaurant manager where tax was deducted from his monthly salary, however, he was never registered for tax by his employer or on an individual capacity. Like I said, he only registered and got a tax number last year (2012).

What kind of penalties is he subject to?  

TaxTim TaxTim says:
16 August 2013 at 18:25

If he were to be penalised by SARS, and in this case they may not have been aware of his having worked and earned taxable income. Although his previous employer should have registered him. It would depend on what SARS decides to penalise, but he could be liable for a R250 per month late submission penalty and interest on that amount. You would need to consult with SARS about this or have him go into a  SARS branch office and sit with a consultant to see how this can be avoided. However as I said, SARS may not even be aware of him having earned income if his previous employer had not submitted his name.

For the waitering income this might have been below the tax threshold (approx R5k per month depending on the year) and he would not be subject to tax and the work performed in a ship, if longer than 183 days would not be taxed either.

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