The 2020 tax filing season will open in the coming months. For this financial year end, the South African Revenue Services (SARS) says it will automatically assess a number of taxpayers.

While taxpayers may not realise it, SARS collects data from a number of third party sources, including employers, banks, medical aid schemes and financial services companies. This year, SARS intends using this data to automatically complete some taxpayers returns with the information it has received from third parties.

What this means for you, our client:

• If you are automatically assessed by SARS, you will receive an SMS by the end of August to alert you that your tax return has been completed and is available for review;
• You may then logon to eFiling to review the return and, after you have compared it to your tax certificates, you may then choose to either accept the assessment or dispute it and file a corrected tax return.

While this is a step in the right direction, SARS will only use data that is in its possession in order to pre-populate your individual tax return. This may lead to deductions or other income streams being omitted from your tax return.

In particular, taxpayers will need to scrutinise their tax returns to ensure that the following deductions (among others) are not missed:

• Donations made to qualifying organisations;
• Travel allowance claims;
• Medical expenses not settled by a medical aid scheme; and
• Qualifying home office expenditure.

Taxpayers still have an obligation to ensure that an accurate return is submitted to SARS. Given that SARS may not have data related to income streams such as Trust distributions and capital gains where no IT3c is issued, a thorough review of the tax return would need to be undertaken before accepting the automatic assessment.

We recommend you engage with your PKF Octagon partner to review your return before accepting the automatic assessment from SARS.