SARS & eFiling - What gives?!

[Red Bird]

Need some advice here...

 

My employer has paid too little PAYE to SARS for the year. They gave me a R5000 travel allowance, thinking it is not taxable and to bring my basic salary down to a lower tax bracket. As you could have predicted, this resulted in me owing SARS thousands of rands.

 

The trouble is that I have been trying to negotiate with my employer for months to adjust the travel allowance as my car is paid off and I don't travel enough business kilometres to justify R5000. She remained adamant that she will pay what she sees fit, based on her accountant's judgment (her elderly mother is the accountant). I am not trained in accounting and in retrospect I should have done further research earlier. I have to add that her mother loaded my income to SARS without the TA, which first had to be rectified through her newly employed accountant. She told the new accountant that I did not keep a logbook throughout the year, which is false. Coincidence?

 

Edit: salary is cost to company based, so they weren't trying to skim on tax expenses.

 

I have told my employer that I am struggling financially because of this error, but she distances herself from it and still demands that I continue to travel to the office for work in December that I can do at home or even discuss over the phone if needed. We travel to clients until November, which I happily do.

 

Just interested to hear what my options are. I don't want to alienate my relationship with my boss, but when is it enough? On a side note, she once cancelled a client's contract for religious reasons, just telling her she is restructuring the business (that did not go well).

Edited November 12, 2019 by Foxy_Roxy

[Steven Knoetze (sk27)]

Need some advice here...

 

My employer has paid too little PAYE to SARS for the year. They gave me a R5000 travel allowance, thinking it is not taxable and to bring my basic salary down to a lower tax bracket. As you could have predicted, this resulted in me owing SARS thousands of rands.

 

The trouble is that I have been trying to negotiate with my employer for months to adjust the travel allowance as my car is paid off and I don't travel enough business kilometres to justify R5000. She remained adamant that she will pay what she sees fit, based on her accountant's judgment (her elderly mother is the accountant). I am not trained in accounting and in retrospect I should have done further research earlier. I have to add that her mother loaded my income to SARS without the TA, which first had to be rectified through her newly employed accountant. She told the new accountant that I did not keep a logbook throughout the year, which is false. Coincidence?

 

Edit: salary is cost to company based, so they weren't trying to skim on tax expenses.

 

I have told my employer that I am struggling financially because of this error, but she distances herself from it and still demands that I continue to travel to the office for work in December that I can do at home or even discuss over the phone if needed. We travel to clients until November, which I happily do.

 

Just interested to hear what my options are. I don't want to alienate my relationship with my boss, but when is it enough? On a side note, she once cancelled a client's contract for religious reasons, just telling her she is restructuring the business (that did not go well).

 

That sucks, her employer did something similar with my wife. Short taxed her to give her more salary every month, but it cancelled out her yearly rebate. Thing is the inflated salary was never said to be because of the tax shortfall, only found it out afterwards. 

 

For you, if you kept a logbook then claim on work mileage against the TA and you should get something back (or at least owe them less). Aside from that I can't see much you can do. You got the extra income that should have been paid to SARS so legally you do owe them as it was almost advanced to you by the employer, if you follow.

I would definitely tell them to pay the correct TA tax going forward, but it's already November so you are in the same boat for next year unfortunately. It is their error but ultimately you received, and spent, SARS's money which they now want back........

Edited November 12, 2019 by Steven Knoetze (sk27)

[Red Bird]

That sucks, her employer did something similar with my wife. Short taxed her to give her more salary every month, but it cancelled out her yearly rebate. Thing is the inflated salary was never said to be because of the tax shortfall, only found it out afterwards.

 

For you, if you kept a logbook then claim on work mileage against the TA and you should get something back (or at least owe them less). Aside from that I can't see much you can do. You got the extra income that should have been paid to SARS so legally you do owe them as it was almost advanced to you by the employer, if you follow.

I would definitely tell them to pay the correct TA tax going forward, but it's already November so you are in the same boat for next year unfortunately. It is their error but ultimately you received, and spent, SARS's money which they now want back........

Bad luck hey. At least they adapted my salary in April already because I was ganning aan about the TA so much. Now there is no TA. Managed to claim back on traveling but it was not enough to balance it out. Guess there is lots to be learned here and time to deal with the aftermath. Edited November 12, 2019 by Foxy_Roxy

[Longbarn Killer]

That sucks, her employer did something similar with my wife. Short taxed her to give her more salary every month, but it cancelled out her yearly rebate. Thing is the inflated salary was never said to be because of the tax shortfall, only found it out afterwards. 

 

 

PAYE is calculated after the rebate is brought into consideration. So if I understand your comment correctly, the employer processed it correctly.

[Longbarn Killer]

Need some advice here...

 

My employer has paid too little PAYE to SARS for the year. They gave me a R5000 travel allowance, thinking it is not taxable and to bring my basic salary down to a lower tax bracket. As you could have predicted, this resulted in me owing SARS thousands of rands.

 

The trouble is that I have been trying to negotiate with my employer for months to adjust the travel allowance as my car is paid off and I don't travel enough business kilometres to justify R5000. She remained adamant that she will pay what she sees fit, based on her accountant's judgment (her elderly mother is the accountant). I am not trained in accounting and in retrospect I should have done further research earlier. I have to add that her mother loaded my income to SARS without the TA, which first had to be rectified through her newly employed accountant. She told the new accountant that I did not keep a logbook throughout the year, which is false. Coincidence?

 

Edit: salary is cost to company based, so they weren't trying to skim on tax expenses.

 

I have told my employer that I am struggling financially because of this error, but she distances herself from it and still demands that I continue to travel to the office for work in December that I can do at home or even discuss over the phone if needed. We travel to clients until November, which I happily do.

 

Just interested to hear what my options are. I don't want to alienate my relationship with my boss, but when is it enough? On a side note, she once cancelled a client's contract for religious reasons, just telling her she is restructuring the business (that did not go well).

80% of a travel allowance is subject to PAYE. So if they insist on giving you a travel allowance, they should be taxing R4 000 of the R5 000. If your IRP5 doesn't show a travel portion, you will not get any deductions.

 

You can opt to pay tax on the higher amount. So, what i am saying is, let them keep the travel at R5 000, but you can opt to the full amount to be taxable. There will be no cash implications for them as it is your money they are withholding to pay over to SARS.

[scotty]

Completed mine, SARS owes me around R500.00 which will just about cover my 947 entry. 

[Mousea]

waiting to get some back.

should be next week

[Red Bird]

PAYE is calculated after the rebate is brought into consideration. So if I understand your comment correctly, the employer processed it correctly.

Not at all, unfortunately. They worked out PAYE based on a lower tax bracket. Gross salary was in higher bracket, but they were trying to get basic salary to a lower tax bracket (lower taxes paid) as they thought the TA does not count as income.

[Red Bird]

80% of a travel allowance is subject to PAYE. So if they insist on giving you a travel allowance, they should be taxing R4 000 of the R5 000. If your IRP5 doesn't show a travel portion, you will not get any deductions.

 

You can opt to pay tax on the higher amount. So, what i am saying is, let them keep the travel at R5 000, but you can opt to the full amount to be taxable. There will be no cash implications for them as it is your money they are withholding to pay over to SARS.

Thanks. They paid zero tax on the TA. Currently, I am paying tax on the full amount. Will ask for them to load the TA to SARS come next year.

[Jase619]

Not at all, unfortunately. They worked out PAYE based on a lower tax bracket. Gross salary was in higher bracket, but they were trying to get basic salary to a lower tax bracket (lower taxes paid) as they thought the TA does not count as income.

 

This feel like one of those cases where the facts and the law were misheard or misinterpreted and you unfortunately got the short end of the stick. 

[Red Bird]

This feel like one of those cases where the facts and the law were misheard or misinterpreted and you unfortunately got the short end of the stick. 

My suspicion as well. I just hope they will actually allow me a TA for 2019-2020. Can't exactly force them to.

[Thor Buttox]

Not at all, unfortunately. They worked out PAYE based on a lower tax bracket. Gross salary was in higher bracket, but they were trying to get basic salary to a lower tax bracket (lower taxes paid) as they thought the TA does not count as income.

I may think about it slightly differently.

 

If this is all correct, I suspect that they were trying to regulate cash flow for themselves by using tax 'misubderstandings'. Depending on how much you need your job, you may be in a stronger position than you think in terms of demanding correction.

 

If they are in error, and are good people, they would fix this if they were in error.

 

If it was purposeful, it is tax fraud and I would contemplate my options in terms of disclosure to authorities if they don't fix it.

[Red Bird]

I may think about it slightly differently.

 

If this is all correct, I suspect that they were trying to regulate cash flow for themselves by using tax 'misubderstandings'. Depending on how much you need your job, you may be in a stronger position than you think in terms of demanding correction.

 

If they are in error, and are good people, they would fix this if they were in error.

 

If it was purposeful, it is tax fraud and I would contemplate my options in terms of disclosure to authorities if they don't fix it.

If that had been the case, I would have been furious. But, they apologised for the mistake, very late only after it was proved, and initially thinking I did not have my personal affairs with SARS in order... WRT the tax savings for cash flow, I don’t think that was the case. All employee costs are bundled into a set “cost to company” amount. Whether they worked it out correctly or not, it would have costed them the same. The ratio between salary and tax was just incorrect.

 

Initially, the travel allowance was not loaded, but they paid an accountant to fix and reload with TA to SARS correctly. Don’t know how much that costed, so could it be called fair game since all parties had to pay a price? ????

[Thor Buttox]

If that had been the case, I would have been furious. But, they apologised for the mistake, very late only after it was proved, and initially thinking I did not have my personal affairs with SARS in order... WRT the tax savings for cash flow, I don’t think that was the case. All employee costs are bundled into a set “cost to company” amount. Whether they worked it out correctly or not, it would have costed them the same. The ratio between salary and tax was just incorrect.

 

Initially, the travel allowance was not loaded, but they paid an accountant to fix and reload with TA to SARS correctly. Don’t know how much that costed, so could it be called fair game since all parties had to pay a price? ????

Ok, all good then. So in that case, without wanting to appear too critical, I think this is one of those 'understanding the contract/deal' (or rather here on the Hub, 'school fees' ????) moments which you should have known about in terms of basic tax knowledge, and may just have to be happy that there aren't further penalties involved if you pay the balance promptly! Triple tax is not your friend.

[scotty]

Completed mine, SARS owes me around R500.00 which will just about cover my 947 entry. 

2 days later refund reflecting in my account 

 

Money for beers and pizza post 947. 

[Mousea]

2 days later refund reflecting in my account 

 

Money for beers and pizza post 947. 

woo Hoo gave me R 5 835 back