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The new SARS processes explained

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SARS has modernised its PAYE administration requirements and coupled hefty penalties for late submissions to this improved process, says Rob Cooper, a Softline VIP director and chairman of the Payroll Authors’ Group.  Cooper has been involved in the discussion and planning of these changes with SARS since January and says that the process of submitting tax certificates to SARS has been changed substantially.

“As many people are already aware, SARS are very reluctant to accept manual tax certificates and the annual IRP501 reconciliation procedure has changed.  In addition to this, the 60-day filing season for employers has also been postponed to now start on 1 July.” Cooper says.  
Changes will affect companies as follows:
* Software will be supplied, free of charge, by SARS to assist companies to do PAYE reconciliation and to submit electronic and manual certificates electronically.  This software will be available from 1 July 2008.
* Companies will have to capture manual certificates on the new SARS software.
* The IRP501 form has been simplified and is now called the EMP501. This form is incorporated into the software issued by SARS, and is also available from 1 July 2008.
* The filing season for companies will run for 60 days, from 1 July 2008 to 29 August 2008.
Changes will affect employees as follows:
* Each taxpayer will receive a customised return according to their personal requirements. This return will be populated with tax certificate data already submitted by the employer.
* For this reason, employees cannot get annual returns before their employer has submitted their tax certificates and reconciled those to the EMP501.
* Employees will have to request their annual returns from SARS, as these will not be posted in bulk, as in the past.
*  Employees with a single employer, no additional income or deductions, and annual earnings up to a maximum of R120 000, will not be required to submit an annual return.
* The filing season for employees will run from 1 September 2008 to 21 November 2008 for manual submissions, and 23 January 2009 for electronic submissions via eFiling.
Cooper explains that the new process means that by 30 June 2008, companies will need to have all payroll information correct, reconcile financial data and generate electronic tax certificates.
The next step is to install the software provided by SARS, upload the electronic file which is generated on the payroll system, enter the data of manual certificates and reconcile PAYE payments (EMP501). This must be completed by 29 August 2008. Submissions can be made via eFiling from the electronic file, or must be write-encrypted onto a CD and taken to your nearest SARS branch. Once the reconciliation has been done, printed certificates can be issued to employees.
As these are substantial changes to the IRP5 submission and reconciliation process, Softline VIP is hosting a practical seminar for its clients, presented by Cooper. He will interpret the new requirements in practical terms, give guidance on the completion of the tax year-end, and tell you what you can do in preparation for the new submission process.
For more information and to book, visit www.vippayroll.co.za.