Missing a SARS tax deadline isn't just stressful. It's expensive. Administrative penalties can stack up for months before you even notice. Here's what you're actually dealing with, and what to do about it.
What Are SARS Administrative Penalties?
SARS imposes administrative non-compliance penalties when you fail to submit a required return by its due date. These are separate from any tax you may owe. They're a penalty for not filing on time, full stop, regardless of whether you would have owed tax or received a refund.
The penalty is charged monthly for every month the return stays outstanding. The longer you wait, the higher the total climbs.
How Much Are the Penalties?
The penalty amount depends on your assessed taxable income (from your most recent assessment). SARS uses the following scale:
- R0 – R250,000: R250 per month
- R250,001 – R500,000: R500 per month
- R500,001 – R1,000,000: R1,000 per month
- R1,000,001 – R5,000,000: R2,000 per month
- R5,000,001 – R10,000,000: R4,000 per month
- R10,000,001 – R50,000,000: R8,000 per month
- Over R50,000,000: R16,000 per month
Penalties accrue for up to 35 months per outstanding return, meaning a single unfiled return could cost you R8,750 (at the lowest bracket) or up to R560,000 (at the highest) over that period.
Note: If you have multiple outstanding returns, for example three years of unfiled income tax returns, SARS calculates and charges a penalty for each one separately. Multiple outstanding returns multiply your exposure significantly.
Interest on Late Payments
On top of penalties for late filing, if you also owe tax that hasn't been paid, SARS charges interest on the outstanding amount. The interest rate tracks the repo rate, so it shifts over time. Either way, the longer the debt sits unpaid, the more it costs you.
Can SARS Penalties Be Waived?
Yes, but it requires a formal application. You can submit a Request for Remission (RFR) through SARS eFiling if you have valid grounds, such as:
- A serious illness or hospitalisation
- A natural disaster or fire
- Circumstances genuinely beyond your control
- Reliance on incorrect advice from SARS itself
SARS won't automatically grant a remission. You need to provide supporting evidence, and you should have all outstanding returns submitted before you apply. Get compliant first, then ask for remission. SARS tends to look more favourably on taxpayers who have already made the effort to sort themselves out.
What Should You Do If You're Behind?
Act. That's the short answer. The penalty clock runs every single month you stay non-compliant. Here's what we'd recommend:
- File all outstanding returns as quickly as possible, even if you can't pay the tax owed yet
- Submit a Request for Remission if you have valid grounds
- Contact SARS or work with a registered tax practitioner to set up a payment arrangement if needed
- Go forward with a plan. One bad year doesn't have to define your compliance history
How Jen E Can Help
If you've missed deadlines or have unfiled returns sitting in the background, don't leave it any longer. At Jen E Professional Accountants in Pretoria East, we work with people and businesses who have fallen behind with SARS all the time. We'll get your returns filed, work out your penalty exposure, and handle the Request for Remission process for you where it applies. SARS is our day-to-day, and we know how to deal with them on your behalf.
View our tax services or get in touch to discuss your situation confidentially.