The following content was published in Newsflash 2022/39 – SARS Notice Employer filing season

SARS NOTICE: EMPLOYER FILING SEASON

SARS has issued the following notice relating to the employer filing season in respect of the interim period ending August 2022.

The notice can be found below.

Message to Employers/Stakeholders

Please be advised that in preparation for the opening of the Employer Interim Reconciliation Filing Season on 19 September 2022, the prepopulated liabilities reflected on the Reconciliation Declaration (EMP501) during the period 14 to 16 September 2022 may not be complete.

• This will only affect employers for whom a Revised Declaration (EMP201) was processed from 14 to 16 September 2022, for a month during the relevant EMP501 reconciliation period.

• Affected employers are advised to submit such a Reconciliation Declaration (EMP501) from Monday, 19 September 2022.

To comply, you need to upload the requested documents using eFiling, or any other submission channel, including SARS Online Query system (SOQS). The uploading of the relevant documents wil enable a SARS verifier to action the case. If the relevant documents are deemed insufficient, or additional documents are required, this will be requested from you.

The following content was published in Newsflash 2022/41 – SARS EMP501 Reconciliation submission issue

EMP501 RECONCILIATION SUBMISSION ISSUE

SARS has confirmed that they experience a system issue with regards to the pre-population of the EMP201 declared liabilities on the EMP501 return.

As this is an urgent issued to be fixed, SARS has confirmed that this issued will be fixed before Monday next week.

Details of the issue

When trying to submit the completed EMP501 to SARS and error (ERROR 0001) is experience indicating that that no EMP201 returns were submitted for the reconciliation period.

A letter is also issued by SARS which reads as follow:

Request for EMP501 Reconciliation Denied The South African Revenue Service (SARS) hereby wishes to advise you that your Request for EMP501 retum for the period 202208 has been denied. Reæon/s: No EMP201 retums were submitted for the reconciliation period. To remedy this you need to submit all the EMP201 returns for the reconciliation period and then request the EMP501 Reconciliaton. Please note that until such time that the reason for denial has been rectified, you will not be able to subnit the EMP501 for be reconciliation period.

This error is experienced although the monthly EMP201 returns have been submitted to SARS. However, the system does not pre-populate the EMP201 figures to the EMP501 return which results in this error.

If you are experience this error and have submitted your monthly EMP201 returns, please refrain from submitting until next week when SARS has fixed this error.

Dear Employer

EMPLOYER INTERIM RECONCILIATION SUBMISSION: 19 SEPTEMBER TO 31 OCTOBER 2022.

As the South African Revenue Service (SARS) celebrates its 25th anniversary, we value your support and contribution to our country’s economy and her prosperity. We strive to ensure that you understand what we expect from you and what your rights as a taxpayer are. We are committed to improving our service offering to make your compliance easy and seamless.

Reconciliation Season 2022

This year, the Employer Interim Reconciliation Declaration (EMP501) submission period opens on 19 September 2022 and closes on 31 October 2022. Employers are required to reconcile their Monthly Employer Declarations (EMP201) for the first six months of a Reconciliation Year (1 March 2022 to 31 August 2022). These reconciliations are based on the Monthly Employer Declarations (EMP201) submitted, with the tax values of the interim IRP5/lT3(a)s certificates generated, accurate payroll information, employees’ tax (PAYE) payments made, thereafter an Employer’s Reconciliation Declaration (EMP501) is submitted.

We help you comply

To reconcile easily and conveniently we would like to draw your attention to important information that you need to know.
-Employers, Tax Practitioners and Payroll Administrators need to download the latest Employers e@syFile version, which will be released on 16 September 2022. This can be done via SARS eFiling.
-Employers must submit all outstanding annual EMP501 reconciliations and make sure the monthly declarations (EMP201) for the reconciliation period have been submitted, and all payments due have been paid before submitting the interim EMP501 for 2022.
-Where employees are not registered for income tax purposes, employers must register them using Single (“Individual IT REG’) and bundle IT Registration (“Bundled IT REG”) for existing tax numbers as well as new registrations available on e@syFileTM
-First-time job seekers can register for income tax via eFiling or on the SARS MobiApp.

SARS Service Charter

Your Rights

-SARS will help by providing service, responses, instructions and access to information and systems.
-SARS will respect your constitutional right to privacy.

Your Obligations

-Always submit an accurate, fully paid declaration to SARS on time.
-Comply with all prescribed administrative processes and timeframes.

Accuracy and on-time filing are critical
It is very important for employers to capture the correct PAYE liability on the monthly EMP201 returns. The incorrect calculation of the monthly PAYE liability will result in imposition of penalties and interest. This includes corrections done on the EMP501 reconciliation and any shortfall is attributed to the last month of the reconciliation period.

The Employer Reconciliation process is a crucial first step in the wider income tax reconciliaton process enabling SARS to issue individuals with their personal income tax return prepopulated with payroll data. Therefore, incomplete, or inaccurate information will negatively affect your employees’ ability to meet their tax obligations.

Why is it important for you to submit an accurate EMP501 return on time?

If an employer submits the EMP501 late, administrative penalties will be charged. The penalty will equal 1% of the year’s PAYE liability, which will increase each month by 1 percentage point up to 10% of the year’s PAYE liability.

Furthermore, an employer who willfully or negligently fails to submit an EMP201 or EMP501 return to SARS is guilty of an offence and is liable, upon conviction, to a fine or imprisonment for a period of up to two years.

Notice on Employment Tax Incentive (ETI).

The monthly ETI data must be added to the end of the tax certificate information for every employee that qualifies for ETI. ETI data must be reported for all months in the reconciliation period. For the interim bi-annual submission, 6 months of ETI data (from March until August) must be reported, and for the final submission, 12 months of ETI data (from March until February) must be reported.

Submission channels

-Employers with fewer than 50 employees can use either SARS eFiling or SARS e@syFile TM. If the employer has 50 or less IRP5/lT3(a) certificates, the payroll system will generate a tax certificate file, which can then be imported into eFiling
-Employers with more than 50 employees can only file the EMP501 using the Employer e@syFileTM

Enhancements to e@syFileTM Employer

There will be no new features; only general software maintenance will be done.

Status of Submission

Employers must always check the status of submissions to ensure their EMP501 has been successfully filed at SARS.

More information
For information on the completion of manual certificates, please consult the e@syFile Employer User Guide or A Step-by-Step Guide to the Employer Reconciliation Process under Businesss and Employers page on the SARS website at www.sars.gov.za

Compliant employers

We sincerely thank all the compliant employers, who successfully submitted previous declarations that are accurate and making the necessary payments on time.

Sincerely,
THE SOUTH AFRICAN REVENUE SERVICE
September 2022

The following content was published in Newsflash 2022/42 – SARS Notice – Auto Registration

SARS NOTICE: AUTO REGISTRATION OF INDIVIDUALS

SARS are taking steps to automatically register all individuals for Personal Income Tax if according to third party information available to, there is an indication of economic activity, and the individual is not registered.

This strong action is taken in terms of section 22(5) of the Tax Administration Act that states: “Where a person that is obliged to register with SARS under a tax Act fails to do so, SARS may register the person for one or more tax types as is appropriate under the circumstances or for purposes of section 26 (3).”

SARS Notice

PERSONAL INCOME TAX: AUTO REGISTRATION WILL BE INITIATED FROM OCTOBER 2022

As the South African Revenue Service (SARS) celebrates its 25th anniversary, we are committed to improving our service offering and enhancing our systems and processes to make compliance easy and seamless.

Who can be auto registered?

Automatic registration will be initiated for Personal Income Tax for an individual that is not registered for tax, but SARS detects 3rd party data that indicates economic activity. The person is automatically registered by SARS in terms of section 22(5) of the Tax Administration Act (Act No. 28 of 2011 as amended).

Registration for other tax products

Please note that this registration is for Personal Income Tax (PIT) purposes only. If the auto-registered taxpayer is a sole proprietor, he or she may have to register for other tax products like PAYE for an employer, Value Added Tax for a vendor, and Customs and/or Excise if they are a trader in that field.

Notification to the auto-registered taxpayer

SARS will send an SMS and a letter to such an individual, officially welcoming them as a registered taxpayer and informing them of how to access our services and what their rights and obligations are.

What is next after registration?

It is important for newly registered taxpayers to register for eFiling, as this is the most efficient way to file a tax return, view assessment results, make payments, and manage many other tax matters.

More Information

More details regarding our channels, office hours, services, tailored information regarding Personal Income Tax, as well as a comprehensive FAQ repository are available on the SARS website: www.sars.gov.za

Sincerely,

THE SOUTH AFRICAN REVENUE SERVICE

29 September 2022

The following content was published in Newsflash 2022/43 – COIDA Notice – Open Day for Employers

CODA NOTICE: OPEN-DAY MEETINGS TO ASSIST EMPLOYERS

The Compensation Fund is holding three days of Open Day meetings for employers at the Birchwood Hotel and Conference Center, Boksburg, from 11 October until 13 October 2022 starting at 08h30 and ending each day at 14h30.

The intention of the meetings is (and I quote):
“… to assist employers with queries that are not resolved and to make sure that they are finalised on the day.
Employers will get an opportunity to directly engage with the processing officials (Specialists).”

If the Open Day format is well-attended, the Fund will consider holding more of these events in future.

COIDA Notice

Compensation Fund (CF) are inviting employers who wish to be assisted with the following services:

EMPLOYER REGISTRATION FUNCTIONS

1. Application for the employer registration (manual and online)
2. Application for re-registration (Manual application)
3. Application for the change of nature of business (manual and online)
4. Application for the Deregistration
5. Trade Name updating
6. Address updating
7. Processing of Employer’s Banking Details

EMPLOYER ASSESSMENT FUNCTIONS

1. Clearing of employers who are flagged for audit
2. Application for the Revision of Assessment
3. Submission of Return of Earnings (To be assisted with the online submission)

EMPLOYER COMPLIANCE

1. Educate on the obligations of the employers
2. Auditing process conducted by the CF to ensure full compliance by the employers

GAUTENG COID PROVINCE

1. Assisting with the Claims
2. Enquiries on Claims
3. Registration on CompEasy system
4. Verification of claims for employers

ICT

1. Online Employer Registration Errors
2. System errors on the submission of the ROEs

CALL CENTRE

1. Application for the Tender Letter
2. Capturing of employer’s email address
3. CompEasy password and User’s Password reset

For further clarity, please call Mr Tsholanang Moagi (Organising Committee member) at 0780498531 (only during working hours) or the CF Call Centre at 0800 32 1322 and 086 0105 350

The following content was published in Newsflash 2022/44 – SARS Notice – e@syFile Update

SARS NOTICE: E@SYFILE EMPLOYER VERSION 7.2.9

On 3 October 2022, e@syFile was updated to version 7.2.9 to incorporate the following changes:

• Adjustment to the Full Resubmission Request process where previously it was interrupted and user could not proceed
• New EMP501 Form to allow capturing in the field for reason for Over/Understatement of Declaration
• Adjustment to manual capture validation to align with import and pre-submission validation
• Adjustment to correct the Message Type displayed for ETV Letters in the Notification Centre (PAYE_VAL_FAIL_LETTER

The following content was published in Newsflash 2022/45 – UIF Notice – Manual UI-19 Discontinued

UIF NOTICE: MANUAL UI-19 DISCONTINUED

The Unemployment Insurance Fund has today made available via their call center an undated notice that states that from 1 October 2022, all Gauteng Labour Centers will no longer accept manual UI-19 forms that update employee information, usually for the purposes of claiming a UIF benefit.

The notice was not discussed with the PAGSA, can’t (at this stage) be found on the UIF website, and was sent to me today by one of our members.

At the time of writing this Newsflash, the Fund has not yet replied to the urgent email sent by the PAGSA today to senior UIF officials querying the implementation of the requirements of this notice.

UIF Notice: Page 1

The 2-page notice is of very poor quality and difficult to read. On page 1 it states:

In terms of Section 56 of the Unemployment Insurance Act (UIA) 63 of 2001, it is stated that “Every Employer MUST, before the seventh day of each month, provide the Commissioner with all information for the previous month in terms of subsection (1)”.
Therefore, as from the 01st of October 2022. all Gauteng Labour Centers will not accept any MANUAL U119’s from the client. Employers and ex-employees must adhere to this directive.

The above sentence starting with “Every employer … in terms of subsection (1)” is copied from section 56(3) of the Unemployment Insurance Act.

The words “all information” in the above sentence are confusing in that it is not certain what is being referred to.

Is it the detailed information that is specified in the E03 specification that payrolls obey when creating the employee declaration file every month, or is it the subset of that information that is specified by regulation for the UI-19 form?

The full section 56 is included in the appendix to this newsflash for your convenience.

Quite how section 56 of the Unemployment Insurance Act empowers the UI “Management” that issued the notice to discontinue the manual UI-19 is uncertain, but more important is to determine what to do from 1 October 2022.

Lastly, note the reference to “all Gauteng Labour Centers”.

Again, one can only take the notice at its face value – Gauteng Labour Centers will no longer accept UI-19’s from 1 October 2022, but Labour Centers in the rest of the country will accept UI-19’s, at least for the foreseeable future.

UIF Notice: Page 2

The second page of the notice contains a very poor copy of Chapter 1 of the ‘uFiling System User Guide’ containing three steps to assist employers to register for uFiling.

This Guide can presumably be found on the Fund’s website.

While this is not stated, one can only assume that the purpose of the UIF Notice is to notify all employers that are not registered for uFiling, to register as soon as possible (or at least prior to wanting to modify or update employee information by manual UI-19), as this facility will no longer be available.

As soon as more information becomes available, you will be updated.

Annexure: Unemployment Insurance Act Section 56 56. Information to be supplied by employer.— (1) Every employer must, as soon as it commences activities as an employer, provide the information referred to in subsection (2) regarding its employees to the Commissioner, irrespective of the earnings of such employees. (2) The information contemplated in subsection (1) must— (a) include the street address of the business, and any of its branches, of the employer; (b) if the employer is not resident in the Republic, or is a body corporate not registered in the Republic, include the particulars of the authorised person who is required to carry out the duties of the employer in terms of this Act; and (c) include the names, identification numbers and monthly remuneration of each of its employees, and must state the address at which the employee is employed. (3) Every employer must, before the seventh day of each month, provide the Commissioner with all information for the previous month in terms of subsection (1). (3A) The Minister will issue regulations on a special dispensation applicable to domestic employers and small businesses or enterprises regarding the submission of information in subsection (3). (4) The Commissioner may request the employer to provide such additional particulars as may reasonably be required to give effect to the purpose of this Act within 30 days of the request, or within such extended period as the Commissioner may allow.

The following content was published in Newsflash 2022/46 – SARS EMP501 Reconciliation webinar

SARS EMP501 RECONCILIATION WEBINAR

SARS has issued an invitation to a webinar on the Employer Interim Reconciliation Declaration Filing Season.

Details of the registration process and the invitation are copied below.

Invitation to a webinar on Employer Interim Reconciliation Declarations Filing Season

Dear Employer

SARS is committed to assisting taxpayers and traders to fulfil their tax obligations and remain compliant. In this respect, SARS will host a virtual Webinar for employers, where the Employer Interim Declarations (EMP 501) Filing Season will be discussed.

In terms of the Income Tax Act No.58 of 1962, employers are required to deduct the correct amount of tax from employees’ remuneration, pay this amount to SARS every month. Also ensure that SARS receives the Monthly Employer Declaration (EMP201) regularly on time as required. The deductions and payments are then reconciled through the completion of the Employer Reconciliation Declaration (EMP501). In addition, employers must issue final tax certificates (IRP5/IT3(a)’s) to employees within the prescribed time frames and requirements applicable to different employees and employers (certain employers must submit reconciliation documents to SARS before issuing tax certificates).

In line with our strategic objectives, SARS believes that when taxpayers have clarity and certainty about their tax obligations, they will be in a better position to fulfill their legal obligations and be tax compliant.

As an important stakeholder, you are invited to join us at the Webinar. You may also extend this invitation to other interested parties.

The following topics will be covered:
• Submission channels
• General rules for import file structure
• Validation rules updates
• EMP501 reconciliation process

Webinar details:
Theme: Employer Interim Reconciliation Declarations Filing Season
Date: Thursday, 20 October 2022
Time: 17:00 – 19:00
Platforms (Virtual): Zoom and YouTube
Register in advance for this webinar on the following link:
https://sars-gov-za.zoom.us/webinar/register/WN_9yXBhdFIQdyPIBdRj9ECIg. Meeting ID: 982 0435 9129
Passcode: 589509

After registering, you will receive an email confirmation containing the logon information for the webinar and how to have your questions answered during the event. The webinar will also be recorded and posted on the SARSTV YouTube channel after the event.

YouTube: https://youtu.be/T8WIzv3cCg8

If you have questions about Employer Interim Reconciliation Declarations, please send an email to [email protected]

Issued by:

PAYE Enabling and Design, and Taxpayer and Trader Education
6 October 2022

The following content was published in Newsflash 2022/47 – UIF Notice-Retraction of Manual UI19 Discontinuation Notice

UIF NOTICE: RETRACTION OF THE MANUAL UI-19 DISCONTINUATION NOTICE

Background

Without warning or discussion with business partners such as the PAGSA, the Fund announced during September that manual UI-19 forms would no longer be accepted by labour centers in Gauteng from 1 October 2022.

Besides a vague reference to uFiling in the notice, no credible alternative solution was discussed with business prior to the issue of the discontinuation notice. Refer to PAGSA Newsflash 2022-45 for more details of the notice.

Discussions

The PAGSA immediately notified the Fund of the extensive difficulties, uncertainty, and confusion experienced by payroll suppliers and employers resulting from the discontinuation notice, and also pointed out the lack of a credible alternative solution.

I am pleased to bring to your attention that the Fund has withdrawn the UI-19 discontinuation notice with effect from today (21 October 2022), and “apologises to clients, employers, and stakeholders for any inconvenience caused by the circular”.

The full notice of retraction is copied at the end of this Newsflash for your information.

During the latest discussions with the Fund, I repeated my previous requests:

1. To revive the technical discussions that took place during 2016 and 2017 to update the E03 declaration specification that payrolls must obey when creating the monthly declaration file with a view to modernising the requirements as well as providing the additional employee data that the Fund needs in order to fulfil its legal mandate.

2. To discuss the creation of a practical and credible solution to replace the UIF E-Compliance Certificate online system that was introduced towards the end of January 2021 (again without prior notification or discussion with business partners such as the PAGSA).

After many requests and eventually the submission to the Fund by the PAGSA of a report detailing the weaknesses of the E-CC system and the resulting negative impact on business and the economy in general, this system was also withdrawn during a discussion with the PAGSA and other parties on 11 April 2022.

Refer to PAGSA Newsflash 2022-18 for more details and the full PAGSA report.

As soon as more information becomes available, you will be updated.

EMPLOYMENT AND LABOUR ON UIF WITHDRAWING GAUTENG CIRCULAR ON THE DISCONTINUANCE OF ACCEPTING MANUAL UI-19 FORMS

21 Oct 2022

UIF withdraws Gauteng circular on the discontinuance of accepting Manual UI-19 forms

The Unemployment Insurance Fund (UIF) has, with immediate effect, withdrawn the circular that was shared in Gauteng declining to accept manual UI-19 forms from clients.

The UI-19 is a form that confirms the employment status and history, as well as the salary and hours worked by an employee.

The UIF apologises to clients, employers, and stakeholders for any inconvenience caused by the circular. The Fund also assures clients that it will continue accepting the submission of manual UI-19 forms at all labour centres.

However, clients are also encouraged to visit https://ufiling.labour.gov.za/uif/ to submit their Unemployment, Illness, Maternity, and Adoption benefit claims.

Employers can also use uFiling to declare their workers, including foreign employees, and pay monthly contributions.

If and when the Fund considers going fully paperless, the decision will be communicated by the UIF Commissioner, Teboho Maruping, after thorough consultations with clients, employers, and critical stakeholders.

The Fund remains committed to rendering excellent services.

NOTICE ENDS

The following content was published in Newsflash 2022/48 – COID Notice – Deregistration by Inactive Employers

CF NOTICE: DEREGISTRATION BY INACTIVE EMPLOYERS

Background

Legal entities with employees as defined by the Compensation for Occupational Diseases and Injuries Act (COIDA) are required to register as employers with the Compensation Fund.

Note that this requirement excludes domestic employers until the COIDA Amendment Bill is promulgated and made effective.

One registered with the Fund, all employers must every year submit the Return of Earnings (ROE) form (usually by the extended due date of 31 May) that declares the total earnings of all employees for the past year of assessment (March to February), as well as the estimated total earnings for the year of assessment that lies ahead.

If the employer ceases to operate a business or no longer has any employees, the entity must deregister as an employer with the Compensation Fund as soon as possible.

Compensation Fund Deregistration Notice

The full notice (including the deregistration form) can be found in Government Gazette No. 46269.

For your convenience, the main points of the notice are included at the end of this Newsflash.

It is important to note if the entity fails to notify the Compensation Fund that it is no longer active as an employer, the Fund will assume that the employer is still operating and will expect ROE’s.

This will result in an estimated Notice of Assessment that will include penalties and interest and that is legally binding for payment by the employer.

Deregistration Administration

It has come to my attention that deregistration is not an online process and must be done manually.

Unfortunately there are complaints that the manual process is cumbersome, and possibly flawed in that some deregistration applications seem to ‘disappear’.

The PAGSA has requested the Fund to convert the current process to an online application as soon as possible.

The following content was published in Newsflash 2022/49 – COMMENTS INVITED: BUDGET 2023 – PROPOSALS TO CHANGE PAYROLL-RELATED TAX LEGISLATION

The PAGSA has been invited to submit suggestions for changes to payroll-related tax legislation to be included in Annexure C of the 2023 Budget Review.

If a proposal is included in the Budget Review, then in the normal course of the legislation amendment cycle that follows the budget presentation, the change will become law from the effective date published in the promulgated amendment Act (normally 1 March of the following tax year).

Please email your request for changes to the legislation to [email protected] before 20 November 2022.