SARS auto-assessments could leave South Africans paying extra taxes and losing out on refunds

South Africans who do not review their SARS auto-assessments could end up paying too much tax or missing out on refunds to which they are entitled.

While taxpayers may assume their SARS auto-assessments are correct, experts said they should conduct a thorough review, as there could easily be omissions or inaccuracies.

The warning comes ahead of Filing Season 2026, with SARS scheduled to issue auto-assessments between 1 and 12 July.

These assessments are generated using information submitted to SARS by employers, banks, medical schemes, retirement funds, insurers, and other third-party data providers.

Taxpayers selected for auto-assessment will receive a notification via SMS, email, eFiling, or the SARS MobiApp. This system has significantly simplified the filing process for millions of taxpayers.

However, Hobbs Sinclair’s Tax Director, Danielle Luwes, cautioned that the convenience of an auto-assessment should not be mistaken for certainty.

“An auto-assessment is only as accurate as the information available to SARS at the time it is generated,” Luwes said.

“SARS has made enormous strides in digitising the tax system, but it cannot independently verify every aspect of an individual’s financial affairs.”

She stressed that taxpayers should treat an auto-assessment as a starting point for review, not as confirmation that everything is correct.

According to SARS, auto-assessments are based on data received from third-party institutions and are intended primarily for taxpayers with relatively straightforward tax profiles.

However, taxpayers remain responsible for ensuring that all income, deductions, and tax credits have been accurately recorded.

Luwes said one of the most common misconceptions is that once SARS has issued an assessment, all relevant information must have been included.

“In reality, there are numerous situations where information may be incomplete, delayed or incorrectly reported,” she said.

What taxpayers should watch out for on an auto-assessment

There are several things SARS may not detect, Luwes explained. For example, SARS cannot necessarily determine whether a taxpayer has incurred additional deductible expenses.

It may also not be aware of whether a taxpayer’s travel claim has been correctly calculated, or whether all of their retirement annuity contributions have been captured. Luwes urged taxpayers to pay particular attention to:

• Retirement annuity contributions that have not been fully recorded
• Medical expenses that may qualify for additional tax credits
• Travel allowances and business-related travel claims
• Rental income and related deductible expenses
• Interest and investment income that may have been incorrectly reported
• Changes in tax residency status
• Additional income earned from freelance, consulting or side-business activities
• Employer payroll errors appearing on IRP5 certificates

For example, a taxpayer contributing to multiple retirement products during the tax year may find that not all contributions are fully reflected in the pre-populated return.

In another, a taxpayer with significant out-of-pocket medical expenses may qualify for additional relief that does not automatically appear in the assessment.

“We regularly encounter cases where taxpayers are due refunds they were unaware of, simply because they assumed SARS had already taken everything into account,” Luwes said.

“Conversely, we’ve also seen assessments where income was duplicated or reported incorrectly, creating a larger tax liability than was actually due.”

Depending on a taxpayer’s circumstances, correcting omissions or claiming legitimate deductions can result in savings ranging from a few thousand rand to substantially more in complex cases.

What taxpayers should do if they disagree with an auto-assessment

Luwes stressed that taxpayers should not treat the auto-assessment notification merely as an administrative formality.

“Many people see the message from SARS, notice that no action appears to be required and simply move on,” she said.

“That approach can be costly. The assessment may be correct, but it may not be. The only way to know is to review it properly.”

Importantly, taxpayers who disagree with an auto-assessment do not have to accept it. They may submit a tax return containing the correct or additional information during the normal filing season.

SARS specifically provides for taxpayers to amend or supplement information where the auto-assessment does not reflect their complete tax position.

For taxpayers with multiple income streams, investment portfolios, rental properties, foreign income, trusts or other complex financial arrangements, seeking professional advice may be hugely beneficial.

“The cost of a professional review is often far lower than the cost of an error,” Luwes said. “A tax practitioner may identify deductions, credits or compliance issues that would otherwise go unnoticed.”

“In many cases, a short review can provide reassurance that the assessment is correct or highlight opportunities to legitimately reduce a tax liability.”

As SARS continues to expand its auto-assessment programme and increase the amount of third-party data used in assessments, Luwes said taxpayers should embrace the convenience while remaining vigilant.

“Auto-assessments are an excellent development and have made compliance much easier for millions of South Africans,” she said.

“But taxpayers should remember that SARS sees a great deal of information – not necessarily all of it. Ultimately, responsibility for the accuracy of a tax return still rests with the taxpayer.”