Warning to South Africans who have been auto-assessed by SARS

Experts warn that millions of South Africans who accepted SARS’ July auto-assessments without reviewing them risk penalties, refund reversals, or audits.

In July alone, over 5.8 million South Africans were auto-assessed by SARS. However, many taxpayers may have unknowingly accepted incomplete or incorrect tax returns.

TaxTim, a digital tax assistant, explained that SARS introduced the auto-assessment system to streamline tax season and reduce the need for manual submissions.

For many salaried taxpayers with straightforward financial situations, this system works. The same isn’t true for everyone, though.

Those with more complex tax situations who accept an auto-assessment without careful review could miss out on crucial deductions or fail to declare income that SARS doesn’t automatically pick up.

This is particularly true for freelancers, landlords, commission earners, or individuals with multiple income streams.

“It’s not that you purposefully do something wrong,” said TaxTim COO Nicci Courtney-Clarke. “It’s that SARS doesn’t always have your full story.”

“If you don’t check and submit your own tax return for income and/or expenses which may be left out, you’re taking full responsibility for what’s missing, and SARS will hold you accountable.”

SARS paid out over R10.6 billion in tax refunds in July, but these were based only on preloaded data from third parties, like employers, banks or investment platforms.

This data doesn’t always provide a complete picture of someone’s taxes. In many cases, taxpayers who rushed to accept their tax refund may have overlooked declaring rental income, freelance payments, or capital gains.

Others may have missed out on claiming valid deductions like medical expenses, travel reimbursements, or contributions to retirement annuities made after SARS’ data cut-off date.

The result is that a growing number of taxpayers may face additional assessments, interest, and penalties, or have their tax profiles flagged as SARS conducts post-submission checks later in the season.

Hidden errors could cost taxpayers

Courtney-Clarke explained that at first, a taxpayer’s auto-assessment might clear at first. In fact, they may even get a refund.

“However, if SARS identifies a discrepancy later, even a minor one, they can reverse your refund, issue a new assessment, or initiate an audit. That’s not something most people want to experience,” she warned.

What makes the issue more concerning is how seamless SARS has made the process in 2025. Auto-assessed taxpayers receive an SMS or email stating they have received an assessment (ITA34).

No further action is required if the taxpayer agrees with the “original estimate assessment” that appears in eFiling.

If the taxpayer disagrees, they need to click the Request Return button to open and complete a tax return. But TaxTim warned that convenience comes with responsibility. “Just because it looks official doesn’t mean it’s complete,” Courtney-Clarke said.

“If SARS didn’t receive your medical certificates in time, or your RA contributions from July weren’t on file yet, or you earned income from an online gig that a third party didn’t report, it won’t show up on the SARS system. But you’re still expected to declare it.”

Recent tax directive errors affecting pension fund data further highlight the risks. TaxTim explained that a tax directive error by a certain fund caused some retirement lump sum transfers to be taxed incorrectly.

For affected taxpayers, this may result in a false tax debt appearing on their auto-assessment, showing the lump sum as taxable when it should not be.

TaxTim said it has already seen cases where users left their auto-assessment unchanged and were later contacted by SARS for supporting documents or advised of additional tax due.

While this can often be corrected, it creates unnecessary stress. It can delay the finalisation of a return, especially if a taxpayer has already spent a refund they weren’t entitled to.

Fortunately, there are ways to correct the situation. Taxpayers who don’t agree with their auto-assessment have until 20 October 2025 to submit a corrected tax return.

According to TaxTim, filing now with accurate information is the best way to avoid penalties, interest, or disputes later.