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Late Tax Return

What happens if I submit my tax return late? A practical Orion Moon guide for South African business owners.

What happens when a tax return is submitted late?

If you were required to submit an income-tax return and missed the SARS deadline, the return remains outstanding until it is filed. Waiting for the next tax season does not remove the obligation. The longer the return remains outstanding, the greater the risk of recurring administrative penalties, interest on unpaid tax, delayed compliance processes and SARS collection action.

The correct response is normally to establish which returns are outstanding, gather the supporting documents and submit accurate returns as soon as possible. Filing an incomplete or estimated return merely to remove the outstanding status can create additional problems during verification or assessment.

SARS administrative non-compliance penalties

SARS may impose a fixed-amount administrative penalty when a required return is not submitted. The amount is based on the taxpayer’s taxable-income band and can range from R250 to R16 000 per month. The penalty can recur for each month that the non-compliance continues, for up to 35 months.

Submitting the outstanding return is the most important step to stop further monthly penalties from recurring. A dispute or remission request does not replace the obligation to file the return.

How will I know whether a penalty was raised?

Check the SARS Correspondence section on eFiling for a Penalty Assessment Notice, usually identified as an AP34.
Review the Penalty Statement of Account to see each penalty transaction, amount and outstanding period.
Check the Returns Issued and Returns History sections to identify tax years that SARS still regards as outstanding.
Confirm whether SARS issued a final demand or other compliance notice that requires action within a specified period.

What if the late return shows tax payable?

Submitting the return and paying the tax are separate obligations. If the assessment results in tax payable, SARS will issue a Notice of Assessment showing the amount and payment date. Interest may accrue on unpaid tax, and late payment can lead to further penalties or collection action.

If you cannot pay the full amount, do not avoid submitting the return. File accurately, establish the debt and contact SARS promptly. In qualifying circumstances, SARS may consider a payment arrangement, but approval is not automatic and interest can continue to accrue.

What if the late return results in a refund?

A refund is not guaranteed simply because the tax calculation shows an amount due to you. SARS may first verify the return, confirm banking details, offset the refund against existing tax debt or require other outstanding returns to be submitted. Accurate supporting documents and a compliant tax profile reduce avoidable delays.

Can I request that the penalty be cancelled?

You may submit a Request for Remission if you disagree with an administrative penalty or believe there were valid circumstances that prevented compliance. The request should identify the penalty periods and explain the facts, dates and corrective action clearly. Include supporting evidence where relevant.

First submit the outstanding return so that the non-compliance is corrected.
Read the AP34 and Penalty Statement of Account to identify every penalty being challenged.
Submit the Request for Remission through the applicable eFiling dispute process.
Explain the circumstances honestly and provide documents supporting the explanation.
Monitor SARS correspondence for the remission outcome and any further information request.

SARS can allow, partly allow or disallow the request. If remission is disallowed, the next step may be an objection and, where appropriate, an appeal. The correct dispute route and deadlines must be followed.

Common situations that still require attention

“I did not earn income, so I ignored the return.”

If SARS issued a return or your circumstances required submission, the return should still be completed correctly. A nil return should only be submitted when it truthfully reflects the taxpayer’s position.

“My employer never gave me an IRP5.”

Request the certificate from the employer and check whether it appears on eFiling. If the employer’s information is incorrect or missing, resolve the certificate issue before guessing figures on the return.

“I thought SARS had auto-assessed me.”

Check whether an auto-assessment was actually issued and whether it included all income and deductions. Rental income, freelance income, capital gains or other information not received from third parties may still need to be declared.

“The company or trust was dormant.”

Dormancy does not automatically remove tax-return obligations. The entity may still need to submit returns until SARS formally confirms deregistration or the relevant tax type is closed.

How to correct outstanding tax returns

Log into eFiling and identify every outstanding return, notice, penalty and statement of account.
Confirm that personal, representative and banking details are current.
Gather the correct IRP5s, investment certificates, medical records, business schedules and other supporting documents for each year.
Prepare and submit the oldest outstanding return first where later years depend on brought-forward information.
Review each Notice of Assessment and respond to verification requests by the stated deadline.
Settle tax debt, request an approved payment arrangement or follow the correct dispute process where necessary.
Submit a supported Request for Remission for penalties where valid grounds exist.

Why filing late can affect more than the return

Outstanding returns and unpaid debt can affect your tax-compliance status, delay tax-clearance processes, complicate finance or tender applications and prevent a taxpayer from closing a tax type or completing deregistration. For businesses, unresolved company, PAYE or VAT obligations can also affect directors, employees and future submissions.

How Orion Moon can help

Orion Moon can review your eFiling profile, identify outstanding years, prepare the required returns, reconcile supporting documents and explain the resulting assessments. We can also assist with administrative-penalty remission requests, SARS verification documents, payment-arrangement preparation and a compliance plan to keep future submissions on schedule.

Frequently asked questions

Will SARS charge a penalty immediately after the deadline?

Penalty timing depends on the taxpayer’s circumstances, outstanding returns and SARS processes. Do not wait for a penalty notice before correcting a late return.

Does paying the penalty remove the need to submit the return?

No. The return remains outstanding until it is submitted. Further monthly penalties may continue while the non-compliance remains unresolved.

Can a tax practitioner guarantee that SARS will waive the penalty?

No. A practitioner can prepare a complete and supported remission request, but SARS decides whether the legal requirements for remission are met.

Should I submit a late return if I cannot pay the tax?

Yes, the return should still be submitted accurately. Once the debt is known, you can consider the available payment or dispute processes based on your circumstances.

This page provides general guidance. Penalty, interest, dispute and payment consequences depend on the tax type, period, notices issued and the taxpayer’s specific circumstances.

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