If your employees are liable for paying the Pay-As-You-Earn (PAYE), you should ensure the amount deducted from their salaries is paid to the South Africa Revenue (SARS) on time. You can also enlist the services of a withholding agent to handle your tax affairs. Do you know that you can erroneously overpay your taxes to SARS, including PAYE? Fortunately, you can apply for a refund or direct SARS to allocate money for another purpose. This article explains everything you want to know about tax refunds.
Can SARS refund overpayment for PAYE?
While it is mandatory to pay taxes to SARS, the taxpayer is entitled to get a refund if they overpay a particular tax. For instance, SARS can refund you for an overpayment of PAYE tax. In case of overpayment for PAYE, the withholding agent may request SARS to provide a refund. To apply for a refund, one must provide proof of payment made to show the error. However, the taxpayer can choose to allocate the overpayment to another tax or debt.
What Happens if You Overpay SARS?
If you overpay SARS, the viable option you can consider is to request a refund depending on the amount you’re owed by the tax collector. Tax overpayment is common, especially when you don’t pay attention to the appropriate figure you should pay. In some cases, you can overpay taxes to SARS due to mistakes. If you overpay your taxes for an extended period, SARS may end up owing you large sums of money. When you find yourself in this situation, you can claim a refund.
You can request a refund by completing Part A of the Claim for Refund out of Revenue (REV16) form. Once you complete the form, email it to Ibqueries@sars.gov.za. The signed REV1600 must be accompanied by the following documents:
- A letter signed by you requesting a refund
- Proof of payment in the form of an eSTT receipt accessible from the eFiling website (print the receipt)
- Certified copy of your ID
- Three months original bank statement or eStamped generated statement confirming that you are the account holder. It should have your name, bank name, type of account, and branch code.
- In case of a tax practitioner representing you, provide the power of attorney.
If you need help in completing the REV16 form, you can visit your nearest SARS branch or call its Contact Center on 0800007277. You need to scan the documents to send them via email.
If your request for a refund is declined, SARS will notify you and also state the reasons for denial. Make sure all your accounts are in order and you don’t owe the taxpayer any money. If the refund is approved, it will be processed and paid into your bank account within 72 hours.
If you don’t want a refund for an overpayment made to SARS, you can request SARS to allocate the money to another outstanding debt if you have one. Another important thing you should know is that SARS does not pay any refund if the taxpayer has outstanding debt. Alternatively, you can also request SARS to allocate the overpayment to another tax.
Does SARS Automatically Refund?
SARS can automatically offer a refund and process it within 72 hours. However, you need to be selected for auto-assessment to enjoy this benefit. SARS can use data obtained from different sources, including banks, employers, retirement annuity funds, and other institutions, to assess your tax.
SARS will use the data to check if your tax calculation is correct. If everything is in order, the tax collector sends your assessment via SARS MobiApp or eFiling. You will also get a message via any of your preferred communication channels, such as SMS. Log into your eFiling account to view the assessment.
Check if SARS owes you a refund or if you owe some money. You do not have to do anything if a refund is due because it will processed automatically and deposited into your bank account within 72 hours. To avoid delays in the processing of your refund, ensure that your banking details are correct.
How Long Does SARS Take To Refund?
If SARS assesses your tax information and approves the refund, you can expect to get the money within 72 hours from the beginning of the assessment. The funds are released manually, so you should expect to get your money within this timeframe when you meet the following conditions:
- Your banking information is correct
- SARS owes you a refund of more than R100
- Your account has not been selected for verification, inspection, or audit
- You don’t have outstanding returns or debt
The refund can take up to 21 working days if your banking details are selected for verification. It can only be processed once all the supporting documents have been received. When the validation of your details is complete, your refund will be processed. Additionally, a refund can take 21 business days to be processed if your Income Tax return is chosen for verification.
If SARS chooses multiple tax years for verification, the process can take up to 90 business days from the day when all required documents were received. When the verification process is complete, SARS will notify you, and your refund can be processed manually within 72 hours. When your tax return is picked for an audit, there is nothing you can do to influence the period it will take to process any refund owed by SARS.
All registered taxpayers must file their tax returns and pay taxes on time to avoid penalties. In some cases, you may only realize later that you have been overpaying SARS. The good news is that you can request a refund, and SARS will process it once all details are approved. To request a refund, you must complete the REV1600 form and send it together with relevant details to SARS via email. It usually takes up to 72 hours for a refund that is due to be processed and deposited into your bank account.
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