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Recently SARS indicated their intention to modernise the PAYE process from a complex manual one to a simplified automated process. In doing so SARS requested employers to postpone the PAYE reconciliation process and issuing of IRP5/IT3(a) certificates, pending further instructions.
In this regard SARS indicated that until further notice they will not:
- issue IRP501 forms for the 2008 year of assessment;
- provide manual IRP5 books;
- accept any reconciliations or IRP5/IT3(a) certificates for the 2008 year of assessment either electronically or manually;
- accept related test or live date.
Employers and employees must keep the following important practical consideration in mind in respect of the proposed changes:
For Employers -
- employers have time until 30 June 2008 to start preparing for these changes;
- employers then have a 60 day window period – 1 July 2008 to 29 August 2008 – to submit employer PAYE deductions to SARS;
- employees cannot receive or submit their tax returns to SARS until employers complete their PAYE declarations to SARS;
- SARS will provide ALL employers or companies with computer software that can reconcile the deductions they made from employees and what employers paid to SARS;
- the payroll information from employers to SARS will allow SARS to issue the majority of taxpayers with a pre-populated income tax return that contains the income they have earned, complied with the relevant coding;
- employers who did not comply by 29 August 2008 could face severe penalties.
For Individuals-
- the filing period for returns opens on 1 September 2008;
- individuals must REQUEST a return from SARS and can do so from 1 September 2008;
- the deadline for the manual submission of returns is 21 November 2008;
- the deadline for electronic submission of returns is 23 January 2009;
- certain individuals with income below R120 000 per year who have a single employer and source of income and who meet certain criteria WILL NOT have to complete and submit a tax return to SARS;
- their details and income stream will be automatically captured by the new process.
SARS indicated that taxpayers will have to request a return from SARS from 1 September 2008:
- by calling the call centre;
- or visiting a SARS office branch;
- via SARS eFiling;
- sending SARS a request for a return – a form for this purpose will be attached to the letter to taxpayers.
During June SARS will communicate further changes to employers and payroll software providers. The new changes indicate an interesting era in payroll administration and employers would be well advised to keep up to date with their new withholding tax obligations.
anton lockem – senior associate
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