How To Set Up A Payment Arrangement With SARS

By Tevait Feanle •  Updated: 01/23/24 •  6 min read

Dealing with tax debts and outstanding payments to the South African Revenue Service (SARS) may feel very daunting. After all, if you were in a position to pay for everything, you would! Remember that SARS wants to work with you to get yourself back to tax compliance (and your Rands into their coffer) rather than punish you. So SARS has several options for taxpayers who are unable to pay their tax liabilities in full and would rather work with you than face costly court proceedings. One of these options is setting up a payment arrangement. Today we’re looking at what that means and how to do it so that you can get back to full compliance as easily as possible. 

What Is A Payment Arrangement With SARS?

A payment arrangement with SARS is a formal agreement you make with them to pay off your tax debt or other liabilities. Mostly, this means installments over an agreed-upon period rather than a lump sum all at once. Payment arrangements are there to help individuals or businesses facing financial difficulties or cash flow problems meet their tax obligations without penalties or legal action.

Why set up a payment arrangement with SARS? It will allow you to::

So if you’re struggling to pay what you owe, a payment arrangement makes sense- and it will always be better than hiding from the matter! Again, remember that SARS ideally wants to get the tax money owed too, rather than punish you in court. So they are willing to work with most entities that approach them openly looking for a solution.

How To Set Up A Payment Arrangement With SARS

Payment arrangements with SARS are pretty easy to set up, too. Before you deal directly with the ‘taxman’, evaluate your financial circumstances to determine how much you can afford to pay regularly. Be realistic about your ability to meet the terms of the arrangement. They will always want as much cash as possible to settle the debt quickly. But in the end, you have to be able to keep to the terms of the arrangement.

It is better to reach out to SARS as soon as you realize you are unable to pay rather than wait for them to come after you, too. This helps keep goodwill and reduces the chance of legal consequences. 

To set up a payment arrangement, you can contact the SARS Contact Centre, visit a SARS branch, or use eFiling. Have your tax reference number, the tax type and period for which you owe, the amount of the debt, and the reasons for your financial difficulties on hand. Remember, they’re the revenue service, not a date- you don’t need to try to impress them! Just be honest and open about your difficulties. 

SARS will assess your situation and discuss the terms of the payment arrangement with you, including monthly installment amounts, the duration of the arrangement, and any interest they intend to add to the bill.

When the payment arrangement is agreed, you will have to sign a formal agreement indicating everything you’ve decided. Do take the arrangement seriously. Once the payment arrangement is in place, adhere to the agreed-upon terms with regular and timely payments. If you encounter further financial difficulties or need to adjust the terms, contact SARS promptly.

How Do I Lodge A Suspension of Payment With SARS?

In some cases, you may be unable to make any payments to SARS due to extreme financial hardship. In such situations, you can lodge a ‘suspension of payment’ request with SARS. This essentially asks SARS to temporarily suspend the collection of your tax debt until your financial situation improves. It’s available for most tax types but not SDL and UIF back payments, as that was never ‘your money’ to keep in the first place.

As with payment arrangements, reach out to SARS as soon as possible to explain your financial hardship and request a suspension of payment. You can again do this through the SARS Contact Centre, at a SARS branch, or through eFiling. The process is very similar to the one we outlined above. 

If SARS approves your suspension of payment, be certain you remain in compliance with other tax regulations and keep communication open with SARS regarding your financial situation. Don’t expect to be let off the hook forever. SARS will regularly review your situation to determine when you can resume payments. Be prepared to provide updated financial information as needed- they won’t just trust your word on this.

How Do I Write A Letter of Payment Arrangement?

Strictly speaking, you don’t need a set type of letter to make a payment arrangement. You can even request an arrangement via prompts on eFiling. However, if you do need to write to SARS regarding the situation, keep these tips in mind:

Use a professional business letter format. Include your name and contact information at the top, followed by the date. Quote all relevant information they need to identify you- the tax type, your tax number, reference numbers you have for previous communications, and so on. Include the debt amount. 

Clearly state that you are requesting a payment arrangement. Specify the monthly installment amount you propose, the total duration of the arrangement, and any other relevant terms you’d like to discuss. Attach any supporting documentation, such as financial statements or evidence of hardship, to support your request.

Be sure to show them you are committed to complying with the payment arrangement, making regular and timely payments, and maintaining communication with SARS. A thank you for the consideration and a polite formal closure, won’t harm anything either. Sign the letter in ink with your signature.

While it may seem like a scary task, setting up a payment arrangement with SARS is a solid solution for taxpayers facing difficult financial circumstances. You won’t be the first or last person to ask for one, either! With open communication and honesty, you can reach a mutually agreeable solution that helps you get tax-compliant as soon as possible rather than face worry and threats.

Keep Reading

Why Is My SASSA Grant Not Paid?

Why Is My SASSA Grant Not Paid?

Why Is My SASSA Grant Not Paid?. Check out the reasons why the SASSA grant is not paid.

How to Change SASSA Details Online

How to Change SASSA Details Online

How to Change SASSA Details Online. To change your details with SASSA online, all you need to do is to follow these steps

The Difference Between UIF And SASSA

The Difference Between UIF And SASSA

In this article, we will look at both UIF and SASSA. We will dive into questions that confuse individuals regarding these institutions' roles.

SASSA Payment Dates For February 2024

SASSA Payment Dates For February 2024

Stay informed about SASSA payment dates for January, February, and March 2024. Find out about recent grant increases and more.

What to Do When Your SASSA Card Expires in South Africa

What to Do When Your SASSA Card Expires in South Africa

This piece will provide you with step-by-step instructions on how to handle the situation when your SASSA card reaches its expiration date

How to Change SRD Grant Payment Method to Bank Account

How to Change SRD Grant Payment Method to Bank Account

This article will offer information about tHow to Change SRD Grant Payment Method to Bank Account and other information related to this topic.

How Long Does SASSA Take To Approve SRD Grant?

How Long Does SASSA Take To Approve SRD Grant?

We will share information about how long it takes to get SRD approval, SASSA validation, SASSA information cross-check, and many others. 

How to Confirm If You Still Qualify For R350 Grant

How to Confirm If You Still Qualify For R350 Grant

In this section, we will be giving tips on confirming if you still qualify for the R350 grant, the SASSA reapplying process, and the approval status. 

How Long Does It Take For A Sassa Child Grant To Be Approved Online?

How Long Does It Take For A Sassa Child Grant To Be Approved Online?

This article explores the duration for the SASSA child grant to be approved online and provides information on how to check the grant status and balance.

How Do I Appeal To SASSA R350 Grant

How Do I Appeal To SASSA R350 Grant

You can check your status for more information. Should your application be unsuccessful, kindly note you can submit an appeal.

Required Documents to Apply for Sassa Disability Grant

Required Documents to Apply for Sassa Disability Grant

Learn more about the SASSA disability grant. We will share more info about the Required Documents for Sassa Disability Grant

How to Change SASSA Card PIN

How to Change SASSA Card PIN

How to Change SASSA Card PIN. You can change your SASSA PIN if you have either forgotten it or want to change it for security reasons

How to Change Cell Number For SASSA SRD Grant Online

How to Change Cell Number For SASSA SRD Grant Online

Change Cell Number For SASSA SRD Grant . We'll cover many topics, including appealing a denied SASSA SRD and modifying your mobile number

How to Apply For SASSA Care Dependency Grant

How to Apply For SASSA Care Dependency Grant

This article will explain how to apply for SASSA Care Dependency grant and discuss the criteria in more detail.

How to Check SASSA Balance For Child Grant

How to Check SASSA Balance For Child Grant

How to Check SASSA Balance For Child Grant. Checking the remaining balance of child's grant from SASSA can be done in a number of different ways.