Most of us cringe a little whenever we receive communication from SARS. However, many of the messages they send to our eFiling inbox are not bad news at all. The so-called Completion Letter is one of those. Today, we look more closely at the completion letter and what receiving one from SARS means for your overall tax affairs. Don’t worry- it’s very good news!
What Does a SARS Completion Letter Mean?
A Completion Letter from SARS means that SARS has received your tax return and any supporting documents you submitted. They have all been reviewed, and SARS is satisfied that the information in your tax return is correct and accurate.
If that’s the case, you may be wondering why you haven’t seen one before! This is normal. Not every taxpayer receives a completion letter for every return they submit. Usually, you receive your Notice of Assessment and pay or get a refund accordingly.
You will only receive a Completion Letter if your tax return was selected for verification. Verification is a step down from a full audit. You will be requested to send a specific section of supporting documents- typically for 3 months of the tax year in question. Think of it as a ‘face value’ audit. They will make quick checks to determine that the information in the supporting documents matches up with the information on your tax return. If no red flags are raised, they will accept your tax return as-is and issue a Completion Letter to show the process is ended. Alternatively, if they do see red flags in the information you provide for verification, they may refer you for the full and lengthy audit process.
So receiving a Completion Letter means you are back out from under SARS’s eagle eye, and they are happy with the state of your tax affairs. If you have a refund due to you, the Completion Letter means it can now proceed, and you will receive it shortly. If you have tax due on the tax return, the original assessment stands, and you can pay it (if you haven’t already) securely in the knowledge that that is the last assessment for that return.
How Long Does It Take To Get A Completion Letter From SARS?
It typically takes around 10 days for you to receive the Completion Letter from SARS. Remember that these 10 days only start from the point at which you submit all supporting documents they requested for verification.
If your tax return is selected for verification, you will be notified of this via official SARS communication. You then have 21 days to gather and submit the supporting documents (and anything else) they have requested. Occasionally, there may be a second round of requests, but this is relatively unusual. If you do not respond to the initial request, they will escalate the matter, and it could end in a legal battle, so always attend promptly to such requests. The quicker and more transparent your responses, the less chance your tax return will be escalated to a full audit, so it is in your best interests, too.
What Happens After Receiving A Completion Letter From SARS?
Pretty much nothing happens once you receive the Completion Letter from SARS- and that’s a good thing! If you have a refund due to you on the verified return, it should be on the way to you within 7 working days. If tax was due on the return and you have already paid the original assessed amount, you need to do nothing at all. SARS will not be revising the amount due. Of course, if you have yet to pay over the amount, you will need to do that within 21 days, as normal.
The Completion Letter signals the end of the verification process and means SARS will be making no further inquiries about this particular tax return. Of course, they can still choose to verify, or even audit, other returns you have submitted, but this will be handled as a separate matter, with the same steps each time.
How Do You Know If SARS Is Auditing You?
Once you have submitted a tax return, SARS can choose to accept the return as-is. This is the typical response, provided your taxable income declared matches with their third-party sources and is reasonably consistent with previous years. They may also choose your tax return for verification, which is the ‘quick audit’ process we described above. If everything seems to be okay, they will end the matter there.
Alternatively, you may be immediately selected for a full audit. Don’t panic if this happens! While they will audit tax returns that seem ‘suspicious’, in that they don’t match with previous earnings patterns and/or the third-party data they have for you, being selected for audit doesn’t always mean there is suspicion around your return. A certain number of returns are audited at random every year, too, simply to check and test compliance.
You will know SARS is auditing you because they will tell you so via formal correspondence. This will also outline exactly what they need you to provide to proceed with the audit. Provide them with all the documents they request as soon as you can. They are legally obliged to inform you of the outcome of the audit within 21 days of finishing it. They may accept the return as-is, or issue a new assessment based on the audit.
While having SARS look deeper into your tax affairs will always make a taxpayer a bit nervous, understand that these checks are often innocuous and harmless. Provided you have been honest in your tax affairs, you should be able to prove this through the verification or audit process- and soon, the Completion Letter will be on its way to you, signalling the end of any investigation.
