Is Your Tax Communication Costing You? Essential SARS Strategies for High-Net-Worth Individuals
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The South African Revenue Service (SARS) processes nearly seven million tax returns annually, supported by a growing suite of digital tools— including auto-assessments, eFiling, and the MobiApp. While these platforms have streamlined routine submissions for many, challenges still arise for a wide range of taxpayers — whether individuals navigating auto-assessments or those with complex financial affairs, such as high-net-worth individuals and corporations. Verifications, requests for supporting documentation, and audits demand precise, well-documented responses to avoid disputes, penalties, or estimated assessments. In this context clear and effective communication with SARS is not just helpful—it is essential.
Geo Kilian, a tax attorney at Hobbs Sinclair Advisory with extensive experience working alongside SARS, identifies communication gaps as the root cause of tax woes. “The core problem is a lack of clear and effective communication with SARS,” Kilian asserts. “We've seen it time and again: taxation's complexity leaves most taxpayers without the skills to handle SARS's intricate, detailed requests. SARS, a world-class authority, deals with this daily—it's second nature to them. But for the average taxpayer, who interacts with SARS only once or twice a year, the experience can be overwhelming — often leading to poor responses, costly delays, and avoidable mistakes.”
SARS operates as a neutral, protocol-driven entity, meticulously reviewing submissions for compliance with the relevant tax legislation. Requests for more information or assessment notifications may perplex taxpayers, but they stem from SARS's duty to verify claims rigorously. Kilian highlights inadequate submission of information as a key pain point: "A spreadsheet is just numbers; true substantiation requires far more." He notes that in complex matters, many accountants lack training in the Law of Evidence, introducing
evidence in court, or the ability to submit adequate documentation, leading to SARS requesting clarification, delays, and frustration. Without legal backgrounds, practitioners often adopt a 'submit and see' mindset rather than scrutinising laws, applying evidence principles, and properly discharging the onus of proof as set out in the Tax Administration Act. This is a complex task that requires a lawyer's distinct training and perspective.
Effective communication with SARS demands mastering its "language" and precise terminology, providing clear evidence, and adhering to strict legal procedures. Legally, taxpayers bear the onus of proof to substantiate declarations via detailed documentation during verifications or audits. Failing this can result in estimated assessments, with serious financial consequences such as denied deductions or additional taxable income.
It is important to distinguish between verifications and audits. A verification is a relatively quick, surface-level check that is usually resolved with basic supporting documentation. An audit, by contrast is a far more detailed process that can extend to site visits and comprehensive reviews of records. With SARS intensifying enforcement through initiatives such as Project AmaBillions — aimed at recovering billions in unpaid taxes, greater scrutiny can be expected in 2025/2026, particularly for complex or outstanding cases.
Kilian emphasises that complex tax matters benefit from a collaborative approach involving accountants and tax attorneys. “Accountants ensure the numbers are accurate, while lawyers interpret the legal framework of the tax legislation,” he says. “This synergy ensures submissions are both financially sound and legally compliant, reducing the likelihood of SARS queries.” A well-coordinated tax team can:
· Interpret SARS’s requests accurately, avoiding confusion and miscommunication.
· Compile comprehensive supporting evidence, such as bank statements, invoices, and contracts, to substantiate claims.
· Respond promptly to SARS deadlines, preventing penalties or unnecessary delays.
Practical Tips for Effective Communication
To navigate verifications, requests for supporting documentation, or audits:
1. Use SARS Platforms: Submit via eFiling or MobiApp to ensure efficiency and maintain a clear audit trail. Make use of eFiling's compliance check features before submission.
2. Understand Requests: Read letters carefully to pinpoint required info (e.g. payslips, certificates, expense proofs). Respond to verification requests within 21 business days to prevent escalation.
3. Provide Clear Evidence: Organise submissions to directly address SARS’s concerns; review auto-assessments and request edits where necessary to avoid audit triggers.
4. Engage Professionals Early: Consult a collaborative tax team of attorneys and accountants for expert, compliant guidance.
5. Stay Proactive: Use auto-assessment tools and keep audit-ready records, especially in light of heightened enforcement.
Effective communication with SARS, bolstered by professional collaboration and awareness of recent updates, can drastically reduce the stress of verifications and audits. If facing a request, consult a tax team that brings together attorneys and accountants in a coordinated approach — professionals who will respond promptly to ensure your submission is clear, complete, and compliant.
By understanding SARS's requirements and responding proactively, taxpayers can navigate the 2026 season with confidence, contributing to a fairer tax system for all South Africans.