TAX SEASON 2008

Tax made easy for employers

This year, a new PAYE reconciliation process involving a simplified IRP501 and FREE custom-built software will alleviate the problems of the past. The new form, called the Employer Declaration (EMP501) will be available for download from www.sarsefiling.co.za or from your nearest SARS branch office from 1 July 2008. (A draft version has been published on www.sars.gov.za.)

The EMP501 allows employers to calculate the difference between the total value of the tax certificates issued, total annual declared liability and total payments to SARS, resulting in a credit or debit amount to be settled with SARS.

Simply submit the reconciled EMP501 with copies of all tax certificates to SARS via eFiling, on disc or manually at a SARS branch office. If a disc is submitted to SARS, a printed and SIGNED copy of the EMP501 must accompany it.

PLEASE NOTE: deadline for reconciliation is August 29, 2008!

7 EASY STEPS FOR EMPLOYERS

MAY to June 30

1. Look out and attend SARS workshops on PAYE declaration.
2. Record complete IRP5 details for employees including ID and Tax reference number.
3. Ensure that there is a match between:
   • The PAYE Liability
   • The amounts deducted
   • The amounts paid
   • The amounts reflected on IRP5's

JULY 1 to AUGUST 29

4. Use SARS PAYE software which will be available on www.sarsefiling.co.za or obtained from any SARS branch office from 1 July 2008.
5. Submit your reconciled Employer Declaration with copies of all employee tax certificates to SARS via eFiling, on disc or manually at SARS branch office.
6. Pay difference if required.
7. Inform your employees once you have reconciled and submitted to SARS.

1. CUSTOM-BUILT SOFTWARE to make things easy
   SARS has developed software that will allow you to complete the entire reconciliation process easily and electronically. It will be compatible with most payroll systems and will be available for download from www.sarsefiling.co.za or from any SARS branch office from 1 July 2008.

2. FILING SEASON FOR EMPLOYERS
   This 60 day period will run from July 1 to August 29 2008. It is vitally important that you meet this deadline as your employees cannot submit their income tax returns until you have completed the reconciliation process.

3. WHAT IS SARS DOING TO HELP EMPLOYERS PREPARE?
   Over the coming weeks we will embark on a campaign including regional training workshops (advertised in local media or on our website). If you are registered for eFiling, you will receive updates and the latest information via e-mail.

4. DEADLINES FOR EMPLOYERS
   Preparation and Training: May - 30 June 2008
   FILING SEASON FOR EMPLOYERS STARTS!
   EMP501 and SARS software available: 1 July 2008
   Deadline for PAYE reconciliation: 29 August 2008

COMMON QUESTIONS ANSWERED

WHY ARE WE CHANGING THE PAYE PROCESS?

Under the old process it was very difficult to fully reconcile the annual PAYE account - in part because it was a combination of a manual and electronic process and a combination employer/SARS process. The new process is fully electronic and gives employers the ability to finalise their own reconciliation without relying on input from SARS. So the new process is easier for employers - and allows us to pre-populate employees' tax returns with accurate tax certificate information.

WHEN CAN I GET THE NEW EMP501?

A draft of the new form is available on www.sars.gov.za so you can familiarise yourself with it. The actual version of the form in either electronic or manual format will be available for use from 1 July 2008.

WHEN WILL THE NEW SOFTWARE BE AVAILABLE?

This will be available for download from www.sarsefiling.co.za or from your nearest SARS branch from 1 July 2008.

IS THE NEW SOFTWARE COMPATIBLE WITH MY EXISTING PAYROLL SYSTEM?

The new software is designed to form a link between your existing payroll system and SARS and it is compatible with all major payroll systems. We have been working with the Payroll Authors Group to make sure this process works smoothly - and the members will also be hosting a series of workshops of their own to help their clients implement the new process and software.

CAN I USE THE SOFTWARE IF I DON'T HAVE A MAJOR PAYROLL SYSTEM?

Yes. The software can be used to meet your PAYE reconciliation requirements without a major payroll software system.

IS IT POSSIBLE TO USE THE SOFTWARE AS A STANDALONE APPLICATION?

Yes, it is possible.

WHAT IF I HAVE ALREADY PRINTED MY EMPLOYEES' TAX CERTIFICATES? (reconciled with EMP501)

As long as these certificates are correct, you may hand them to employees so that they can compare them to the information which will be pre-populated in their tax returns.

WHAT IF I HAVE ALREADY MADE A CD WITH MY CERTIFICATES?

The new software will import your CSV file into the programme and then populate your EMP501 with this information. It also allows you to capture any manual tax certificates you have. The software then allows you to either:

• Send all this electronically to SARS via eFiling or
• Burns this all onto an encrypted disc (for security) to hand to SARS

WHEN IS FILING SEASON FOR THE EMPLOYERS?

Filing Season for Employers starts on 1 July 2008 and ends on 29 August 2008. This is exactly 60 days - the same period as employers have always had in terms of legislation for the completion of reconciliation.

WHAT HAPPENS IF I CAN'T SUBMIT IN TIME FOR THE DEADLINE?

Most importantly, your employees will not be able to receive a pre-populated income tax return until you have completed your reconciliation. But there are also stiff new penalties for employers who fail to comply with the 60 day requirement. As always, SARS has the discretion to impose these penalties- so if you are trying to comply we will help you, but if you don't make any effort to comply SARS is less likely to be sympathetic!

WHAT CAN I DO TO HELP MY EMPLOYEES?

You can make sure you complete your PAYE reconciliation as quickly s possible- the sooner you do it the quicker your employees will get their income tax returns (and refunds where applicable). You can also provide access to your employees to SARS d Filing so the can file their returns electronically which saves them (and you) time and money.

WHAT CAN I DO TO PREPARE FOR FILING SEASON FOR EMPLOYERS?

Ensure that where payroll systems are used that all the information has been captured and has been finalized. Consolidate the PAYE-related liabilities declared and the actual payments made for the tax year. Ensure that your employee information you have is up to date. Specifically ensure that ID and Income Tax reference numbers are correct.

WHAT IS SARS DOING TO HELP EMPLOYERS PREPARE?

Over the coming weeks we will embark on a campaign to help employers, payroll administrators and practitioners to prepare for and implement the new changes. This would include regional training workshops where we teach you how to get a reconciled EMP501 and how to use the new software. You will be notified of these workshops via the local media and on our website. If you are registered for eFiling you will receive updates and the latest information via e-mail.

FOR INDIVIDUAL TAXPAYERS

Last year, SARS introduced a shorter, simpler two-page income tax return. We also did away with the need to submit supporting documents and relied on information supplied by employers and other third parties instead. We also made the submission of income tax returns via eFiling simpler and gave taxpayers an extended period to submit their income tax returns electronically. This year we are building on the success of the previous year's innovations and working hard to address any problem areas and make the whole tax process easier, faster and more convenient for everyone.

PLEASE NOTE: deadline for manual submission is November 21, 2008

8 EASY STEPS FOR INDIVIDUAL TAXPAYERS

MAY to JUNE 30

1. Receive and keep safe your documents (medical, pension, RAs)
2. Inform SARS of any change to contact details:
   • SARS Call Centre on 0860 12 12 18
   • Nearest SARS branch
3. Visit www.sarsefiling.co.za and register as an eFiler

JULY 1 to August 29

4. Get your IRP5 from your employer after 1 July.
5. Request your tax return from SARS by:
   1. downloading it from www.sarsefiling.co.za
   2. calling SARS Call Centre on 0860 12 12 18
   3. visiting your nearest SARS branch
   4. completing the tax request form that SARS will have sent you by post
6. Compare the information on your IRP5 with the information on your tax return to make sure it is correct
7. Check your return using the free online calculator on www.sars.gov.za
8. Submit your tax return to SARS through eFiling, dropping it off at your nearest branch or by posting it.

1. NO TAX RETURNS FOR HALF A MILLION TAXPAYERS!
   This year, taxpayers earning R120 000 per annum or less from only one employer and with no additional income or deductions other than those reflected on their employee tax certificate will not have to submit an income tax return!

2. PRE-COMLETED TAX RETURNS FOR EMPLOYEES
   

   Taxpayers who are employed i.e. who get an IRP5 or IT3(a), will receive a pre-completed income tax return already containing their employee tax certificate (IRP5/IT3(a)) information. These taxpayers will only have to verify the information, complete the requested portions on additional sources of income or deductions, sign it and submit it to SARS. In other words, from this year on, each return will be customized to only contain the income and deduction fields relevant to the taxpayer.

3. REQUESTING YOUR UNIQUE, CUSTOMISED INCOME TAX RETURN FROM 1 AUGUST 2008
   

   As all income tax returns will be customized this year, taxpayers need to tell SARS what fields to include in their return. You can do this through the following channels:
   • eFiling at www.sarsefiling.co.za
   • a toll-free number
   • at any SARS branch nationwide
   • by filling out a simple return request form which SARS will post to all taxpayers during July.

4. DEADLINE FOR INDIVIDUAL TAXPAYERS
   Manual submission: 21 November 2008
   eFiling submission: 23 January 2009

COMMON QUESTIONS ANSWERED

HOW WILL PRE-POPULATION OR RETURNS WORK?

This year we are introducing a new Filing Season for Employers (see elsewhere on this page) during which all employers must send verified copies of employees' tax certificates to SARS. This will take place between 1 July and 29 August. SARS will then take this information and enter it into your tax return for you.

WHAT HAPPENS IF MY EMPLOYER SENDS SARS THE WRONG INFORMATION?

You are still responsible for the information in your income tax return - which you sign to declare that is true and correct. So you need to check all the information on your return - including the information which SARS fills in for you - to make sure it is right before you sign and submit it to SARS. You must check your employee tax certificate information against the IRP5 your employer gives you - and if it is wrong you must correct it on your form.

WHAT IS SARS DOING TO MAKE SURE ALL EMPLOYEES SUBMIT ON TIME?

We have been working closely with employers and representative organizations to plan and implement this Filing Season for Employers - and most employers are excited about this year's changes. SARS will also be reminding employers of the deadline in an advertising campaign like we do for the traditional Filing Season. And we have introduced stiff penalties for employers who do not comply with the 29 August deadline!

WHAT HAPPENS IF MY EMPLOYER DOES NOT SEND SARS MY INFORMATION IN TIME?

SARS can't provide you with a pre-populated return - and we can't process your return - until we get your tax certificate information from your employer. But obviously we will not penalise you for the non-compliance of your employer.

WHAT HAPPENS IF I AM NOT EMPLOYED OR SELF-EMPLOYED?

You will still order your return using the return request form or the toll-free number but will indicate that you don't have an IRP5.

DOES SARS KNOW WHAT FIELDS TO BUILD INTO MY RETURN?

You need to tell SARS what kinds of income and deductions you had during the previous tax year so that we can build you a customized return. You can do this by filing in a quick and easy form that we will send you during July or from 1 September 2008 you will e able to call our contact centre or visit your nearest branch to request your return. Of course, the easiest way is to use SARS eFiling where you can build your own return!

WHAT CAN I DO IN THE MEANTIME?

If your postal address has changed since last year then you should update your details with SARS so you can receive your customized return. You can do this by visiting your nearest branch or calling our contact centre. If you have access to the internet you can also register as an eFiler to enjoy all the benefits and advantages of this free, secure, electronic filing facility. Visit www.sarsefiling.co.za

If you any difficulties or questions concerning your tax return, contact our call centre on 0860 12 12 18 or visit www.sars.gov.za