• Carrie Norden, tax specialist, Allan Gray

Should I file a tax return for the 2020 tax year?

In response to COVID-19, the South African Revenue Service (SARS) has tried to simplify the tax filing process for individual taxpayers and remove the need to visit branches.

SARS has introduced a four-phased approach to filing season this year:

  1. Phase one: Employers and other third-party data providers, like investment managers and medical aid schemes, were required to submit their data to SARS. This needed to be done by 31 May 2020.

  2. Phase two: SARS validates the third-party data and follows up with those third parties who have not submitted the data on time.

  3. Phase three: This is the “auto-assessment” process and it starts on 1 August 2020. A significant number of taxpayers will receive an SMS from SARS to confirm that SARS has used third-party data to prepare their tax returns on their behalf and that a draft assessment is available on eFiling or the SARS MobiApp for them to review. Some taxpayers may receive communication from SARS before 1 August 2020 explaining why they have not been auto-assessed, for example, if they have outstanding tax returns that need to be filed.

  4. Phase four: Taxpayers who have not been auto-assessed, or who have not accepted an auto-assessment, can then start to file their tax returns via eFiling or the MobiApp from 1 September 2020. Taxpayers who cannot file through the digital platforms will be permitted to visit a SARS branch by appointment only.

What does it mean to be auto-assessed?

SARS is using data from third parties, such as medical aid schemes, retirement fund administrators, employers and financial institutions to pre-populate your tax return and essentially do the filing for you.

If you are selected to be auto-assessed, you will be directed via SMS to eFiling or the SARS MobiApp to view your return. If you accept the outcome, you do not have to complete a tax return because SARS would have done that for you. If you are due a refund, SARS will pay the refund to you as per normal, but you need to ensure that your bank details are up to date on SARS’s records. If you owe SARS money, you can make payment as per normal on eFiling, via EFT or the SARS MobiApp.

If you want to edit your tax return, you should not accept your auto-assessment and will need to wait to file your return from 1 September 2020.

Why would I need to edit my auto-assessment?

You may have additional deductions to claim or income to report that has not been pre-populated on your return by SARS. For example, you may have earned rental income or incurred excess medical expenses which were not on record with your medical aid.

It is important to check that all the third-party information that SARS has on record for you displays correctly on your tax return before you accept your auto-assessment. This means you need to carefully check your tax certificates from your employer, medical aid provider and investment managers and compare these to your auto-assessment.

If I do not get auto-assessed from 1 August or I want to edit my auto-assessment, by when should I file my tax return?

If you do not get auto-assessed or need to edit your auto-assessment, you need to comply with the following deadlines to file your tax return:

  • 1 September – 16 November 2020: Non-provisional taxpayers who file online via eFiling or the SARS MobiApp

  • 1 September – 22 October 2020: Taxpayers who cannot file electronically can file at selected SARS branches by appointment only

  • 1 September 2020 – 29 January 2021: Provisional taxpayers who file via eFiling

If I am not selected to be auto-assessed, does that mean I need to file a tax return?

You may not need to file a tax return at all, even though you may have earned income and paid tax on that income during the 2020 tax year.