SME companies using automated payroll software solutions will find it easy to conform to new regulations announced by Finance Minister Trevor Manuel and SA Revenue Services yesterday (Thursday 15 May).
SARS announced that from 1 July 2008 to 29 August 2008 companies will be required to submit PAYE information (EMP501 returns and employee tax certificates) using the new procedures for the Employers Filing Season 2008. This can be done electronically using the online e-filing system or free software that will be made available by SARS. SARS says it will ensure greater accuracy and allow all IRP5, IT3 (a) and IRP501 returns to be submitted electronically or on a CD delivered to a SARS office.
Individuals will be required to submit their returns manually between 1 September 2008 and 21 November 2008 or via e-filing from 1 September 2008 to 23 January 2009. Having information earlier will allow SARS to release to individuals’ Personal Income Tax forms already populated with accurate information received from employers which will simplify the return and speed up the process, ensuring individuals will receive quick assessments and refunds.
“Companies using automated payroll software systems in any event create these files automatically so they then simply need to upload electronically,” says Grant Lloyd, MD of payroll software developer Softline Pastel Payroll. “Companies using manual systems or spreadsheets will still have to manually calculate all of the parameters and enter them into the SARS software.”
Lloyd sees the new regulations as a positive step in the SARS move to convert companies to an electronic tax system which has the advantages of being quicker, more accurate, more efficient and will make life easier for compliant taxpayers while allowing SARS to concentrate on non-compliant taxpayers.
“By offering free software for electronic tax certificates and on-line EMP501 forms, SARS is also encouraging companies to go the electronic route with PAYE administration, the benefit being that they will be able to create employees on the electronic system, capture their IRP5 information, generate the EMP501 return and finally print IRP5 certificates.”
Soon-to-be promulgated legislation will allow heavy penalties to be imposed on late returns and Lloyd says this is another means of encouraging companies still handling these processes manually to convert to electronic options.
“Companies on manual systems would be wise to consider implementing automatic payroll software as it is a key element in making the conversion to electronic procedures because the software automatically produces all the information required to populate the on-line forms and returns.”