Waiting for a refund from SARS? Read this

Published on 7th May, 2020 at 03:34 pm

Before you log a query (or complaint) with SARS for money you’re owed, check you’re not causing the delay yourself. Jaco Nel, director of NJN Auditing & Consulting, shares what you need to know.

What is a tax refund?

Simply put, you would’ve overpaid tax in this tax year, or previous tax years, and SARS owes you money, which should be paid back into your bank account.

What does the law say?

“A taxpayer’s right to a tax refund is set out in Section 190 of the Tax Administration Act, 2011 (the TAA),” says Nel. Legally, SARS has an obligation to you as a taxpayer to pay you any refund you are due.

But there are conditions linked to this. “Where the verification, inspection or audit of the refund hasn’t been finalised yet, SARS may withhold the refund,” explains Nel. Even so, you as the taxpayer have the option to appeal or object to a decision taken by SARS not to refund you, according to Section 190 (6) of the Act.

Is the delay on your side?

There could be blind spots on your part that are holding up the process of paying out your refund. First find out whether one of the following cases applies to you:

SARS has selected your tax return for audit or verification
If your return has been selected for audit, SARS will request supporting documents. Once you’ve submitted these on eFiling, the audit will be finalised by SARS. They have 21 days to send you a letter confirming completion of the audit, or a revised income tax assessment. “Your refund should be processed within 7 working days from the issuing of the completion letter,” says Nel.

How do I know if my tax return has been selected?
Cast an eye over your income tax assessment (ITA34) and see whether there’s a ‘yes’ or ‘no’ next to ‘Selected for audit or verification’ under Compliance Information. “If it’s a ‘Yes’, wait for SARS to send a follow-up letter requesting supporting documents,” says Nel.

Your returns aren’t up to date
“SARS will not pay out any refunds if you have any outstanding returns,” shares Nel. “For individuals, these would be your income tax returns and provisional tax returns.” You’re an individual taxpayer if you earn a salary and your employer pays pay-as-you-earn (PAYE) tax on your salary on your behalf. You’ll find the PAYE deduction as a line item on your payslip, and should receive an IRP5 form from your employer every year so you can complete your individual tax return.

How do I resolve this?
Ensure you file all your tax returns by the end of February each year so you don’t run late and incur penalties. TaxTim makes filing your tax returns easy, and it’s freely available to Reality Club, Reality Core, Reality Plus and Reality Health members.

Here are four important reasons why it pays to do your tax return every year.

SARS hasn’t verified your banking details
SARS also won’t pay out any refunds to taxpayers whose bank account details haven’t been verified. “This can be an issue for taxpayers who registered for income tax before SARS required proof of banking details for income tax registration, or for taxpayers who have recently changed their banking details,” explains Nel.

How do I fix this?
Visit a SARS branch with your ID and proof of banking details to verify them.

You owe money to SARS
“In most instances, SARS will deduct debt owed to them from the refund due, and only refund the balance to you, the taxpayer,” shares Nel. You may, in some instances, never see your refund because it’s set off against the money you owe SARS.

Read this to find out how to save big on your tax return.

Understand the process

Getting your money back starts with following the process SARS has set out for queries and complaints:

1. Call
   Call the SARS Contact Centre on 0800 00 7277 and query the status of your refund. The consultant should be able to clarify the reason for the delay. If it is caused by non-compliance on your part, it’s your duty to resolve anything outstanding. Once resolved, the refund should be paid out within 7 working days, says Nel.
2. Log a query on eFiling
   Say, for instance, your non-compliance is resolved but you don’t see your money refunded after 7 working days. It’s your responsibility to call the Contact Centre to lodge another query about your refund.Why the hold-up?
   “SARS places a payment ‘stopper’ on a taxpayer’s account when they are not compliant (outstanding returns or taxes, or banking details that haven’t been verified),” shares Nel. “This ‘stopper’ is not always removed once the non-compliance has been rectified.” What can you do?
   Request a case number from the consultant and hang on to it until the matter is resolved. “SARS has 21 working days in which to respond to the query,” says Nel.
3. Lodge a complaint on eFiling
   If there’s no sign of change after 21 working days, you can lodge a complaint with SARS on eFiling, suggests Nel.Still not being heard?
   If you’ve exhausted the above internal SARS route for your query and have no luck, your final option is to lodge a complaint with the Tax Ombud. But don’t make this your first stop on the query and complaints course. “You must first exhaust SARS’ internal remedies (such as lodging a complaint and getting no assistance) before approaching the Tax Ombud,” cautions Nel.

Once you eventually receive your refund, consider these options for how to put it to good use.

Click here for an easy-to-use, comprehensive guide to everything tax-related. For advice on how to make decisions for a tax-efficient investment portfolio, speak to a qualified financial planner today. Book a meeting now.