Do SARS check our bank accounts?

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blue-eye-boy

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I do some part time work, and mostly take cash only. But sometimes you get that customer who prefers eft to my account. So, do SARS check our bank accounts?
 
LazyLion

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Yes, they are coming for you! :p

actually, I would think there would need to be some pretty huge deposits before you catch their attention. How much money are we talking here?

And why don't you keep your cash in your mattress and avoid paying those hefty cash withdrawal fees??? :p
 
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blue-eye-boy

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Some months it's like R5000, then the next month R1000, and so on. Say on average R15 000 per year. What would you call a "huge deposit"?
 
blunomore

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They do not check all accounts regularly, but they do have the right, yes.

So I guess they only do that once their suspicion is aroused.
 
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Juggy

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Why is anything thread that has SARS in it in the Wealth section?
 
DJ...

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They can and they do. It also doesn't necessarily have to be a high amount. Audits are often random and your name can be drawn from a hat. You should declare that cash! Over the course of your tax paying life you are likely to be audited, and if they uncover that for a certain time frame you regularly received an income without declaring it, you're in trouble, especially the longer you leave it, and the tools they use for this are becoming pretty sophisticated - I reckon we'll reach a stage where it is automated and then you're screwed - one relatively large (in your case it probably would be) discrepancy and you become the target of a forensic audit. They will nail you with compound interest going back all the years since you first didn't declare it, and for every single deposit that you didn't declare.

At R15k per annum, a quick calculation shows that if you get nailed in 10 years time and continue to do this, you could be liable for as much as R112,000 in interest at a rate of 10%, this is on top of the actual tax that you'll have to pay on that amount too. All in all they could nail you for about R150k, which would in fact be the entire amount that you should have declared in the first place. So by trying to save about R3k to R6k in taxes per year, you are risking having to fork out R150k in ten years time.

IMO you should declare it - it's not worth the risk unless you can somehow hide that cash (iow it never hits a bank account)...
 
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B

blue-eye-boy

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So then I must just except cash in the future. It's so bad actually, I do the part time work just to get through every month. Now SARS can take away their bit too.
 
DJ...

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jacqvt said:
So then I must just except cash in the future. It's so bad actually, I do the part time work just to get through every month. Now SARS can take away their bit too.
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You're taxed on a sliding scale, so either you have over extended yourself or you will be taxed fairly once the income has been declared. Do you qualify for a rebate at the end of the year? Have you checked? If not, then I suggest you do - the rebate might offset the additional tax if you qualify - speak to SARS about it though. If you screw them they will screw you ten times over. But they do handle the tax returns on your behalf now if you go in and they will tell you if you qualify for a rebate and how much. They are also no longer compensated for denying rebates AFAIK so it is not in the employees' best interests to try screw you over. They are however compensated for highlighting tax evasion (which is what you are doing).

Unfortunately for you, paying tax is the law and tax evasion is illegal. Now tax avoidance, well that's another story but I'd suggest you try rectify the issue with them before going the avoidance route. Declare what you haven't so far, and accept cash moving forward as and when you can. Just don't deposit that money...;)
 
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Deenem

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jacqvt said:
I do some part time work, and mostly take cash only. But sometimes you get that customer who prefers eft to my account. So, do SARS check our bank accounts?
Click to expand...

I think there is an automatic notification on any amout over R50 000, this was a few years ago, so it might have 'inflated' a bit by now.

Someone at SARS gets a daily report of these transactions.
 
LazyLion

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jacqvt said:
So then I must just except cash in the future. It's so bad actually, I do the part time work just to get through every month. Now SARS can take away their bit too.
Click to expand...

Just don't deposit the cash. Use it for living expenses.
 
DJ...

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Deenem said:
I think there is an automatic notification on any amout over R50 000, this was a few years ago, so it might have 'inflated' a bit by now.

Someone at SARS gets a daily report of these transactions.
Click to expand...

The amount has remained the same AFAIK. I have a friend who works for the receiver and was warned about this not so long ago. However the larger issue is continued tax evasion - the audit trail leads right to his doorstep and it's a clear case of tax evasion if he continues to deposit that money. It's also tax evasion if he's paid cash but he'd have to be earning mega bucks in cash for them to prove any of that.

The audits on regular joe soaps are random though AFAIK - he could be nailed tomorrow, next year, 10 years' time - and I would not want to be in his boots when that happens if he continues to deposit the money. I know of a businessman in Durbs who lost everything he owned when the tax man came knocking - he also landed up in jail because of a VAT issue but he was taking cash and not declaring it and they nailed him going back years. If it was just the tax, he'd have been fine, but the compound interest ruined him...
 
DJ...

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jacqvt said:
Yes that's what I'll do from now on. Then the freeking bastards can go to hell.:mad:
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Another problem arises here - is this your own business that you're running? I assume it must be in which case your business can be audited. If the client pays you and it goes through the company's books, and the company is ever audited, they will want to know where that money went. Now you can either sacrifice that cash flow (not good business practice at all) by writing it off to bad debts or just not account for it (again, terrible business practice); both cases SARS can't find the cash because they won't be looking for it but you won't ever get your books signed off by your accountant if he chooses to do so. Otherwise if you have a CC you can account for the cash properly and declare that income as a dividend, in which case the tax is a lot lower than income tax - this is called tax avoidance which although it is blatantly obvious for SARS to see, it is perfectly legal. Use the law to your advantage...;)
 
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hashbrown99

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DJK said:
They can and they do. It also doesn't necessarily have to be a high amount. Audits are often random and your name can be drawn from a hat. You should declare that cash! Over the course of your tax paying life you are likely to be audited, and if they uncover that for a certain time frame you regularly received an income without declaring it, you're in trouble, especially the longer you leave it, and the tools they use for this are becoming pretty sophisticated - I reckon we'll reach a stage where it is automated and then you're screwed - one relatively large (in your case it probably would be) discrepancy and you become the target of a forensic audit. They will nail you with compound interest going back all the years since you first didn't declare it, and for every single deposit that you didn't declare.

At R15k per annum, a quick calculation shows that if you get nailed in 10 years time and continue to do this, you could be liable for as much as R112,000 in interest at a rate of 10%, this is on top of the actual tax that you'll have to pay on that amount too. All in all they could nail you for about R150k, which would in fact be the entire amount that you should have declared in the first place. So by trying to save about R3k to R6k in taxes per year, you are risking having to fork out R150k in ten years time.

IMO you should declare it - it's not worth the risk unless you can somehow hide that cash (iow it never hits a bank account)...
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Yip. Just ask Dave King who took on SARS, spending an obscene amount of money fighting them over 8 years.

Do you really need this in your life? :eek:



http://www.fin24.com/articles/default/display_article.aspx?Nav=ns&ArticleID=1518-1786_1977622

Plus once they have proof of your 'untrustworthiness' they will never stop checking up on you
 
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blue-eye-boy

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DJK said:
Another problem arises here - is this your own business that you're running? I assume it must be in which case your business can be audited. If the client pays you and it goes through the company's books, and the company is ever audited, they will want to know where that money went. Now you can either sacrifice that cash flow (not good business practice at all) by writing it off to bad debts or just not account for it (again, terrible business practice); both cases SARS can't find the cash because they won't be looking for it but you won't ever get your books signed off by your accountant if he chooses to do so. Otherwise if you have a CC you can account for the cash properly and declare that income as a dividend, in which case the tax is a lot lower than income tax...
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No it's not any kind of business, and my customers isn't businesses. And no one will querry where a normal joe's money goes, if he pays me cash.

I know this isn't good practise what I'm doing, but hell, I do it because I must do it to survive. If they take their chunk, what the hell do they think I must do to fill up that gap again too? Times are tight, and a man gotta eat.:eek:
 
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