SARS Audit preparation

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ViperGTI

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I'll be declaring my rental income as of this year together with expenses related to the property used for rentals. Basically I have an Access database that I use to capture all the income each month and every time I have an expense, I capture the date, amount, supplier, purpose (description) and assign it to a category (electricity, interest, rates & taxes, gardening, etc.).

Now basically, every time something changes or if the amount claimed back exceeds a certain amount, SARS conducts a "mini-audit" where I must send them supporting documentation and so on. Usually it is just my car logbook and medical certificate. What must I do this year? Can I just export the contents of the Access database into a nice layout in Excel and send them that or do I need to scan each slip / invoice and send them everything?
 
If they ask for information, I give them the lot. Last time they wanted more info they got over 120 pages!
 
The excel sheet on it's own would not be sufficient, anyone can create an excel sheet and claim anything. If you provide your invoices with the excel summary they would probably find it easier to assess your situation and move on to other things.
 
They want the invoice.

I wouldn't bother scanning until they actual demand the stuff though. Just make sure you have all of it *somewhere*.
 
In a rental/SARS situation where they requested additional documents I submitted an Excel spread sheet showing the income and expenses, and one scanned item of each of the following: one property rates account, one levy invoice and also new sliding door invoice (old one broke) and homeloan tax certificate
 
Just send the Excel sheet. They will ask for specifics if needed such as invoices. IMHO always send the least amount of info needed, unless specifically asked for it.
 
For rental income, contracts usually do. As for the expenses like interest on bond, electricity etc they will need actual invoices.
But send that excel spreadsheet, they usually do a sample audit and will notify you which invoices they need
 
Gawd, I sent a neat excel spreadsheet for the 2012 tax year and included doctor's bills etc. It was the biggest mistake of my life. They want invoices and proof of payment. I'm still battling to sort it out. :cry:

Less-is-more but be sure to have your paper work ready.
 
rubytox said:
Gawd, I sent a neat excel spreadsheet for the 2012 tax year and included doctor's bills etc. It was the biggest mistake of my life. They want invoices and proof of payment. I'm still battling to sort it out. :cry:

Less-is-more but be sure to have your paper work ready.
Click to expand...

SARS just looks scary from the outside. They actually just like very strict parents. If they audit you, send the following: IRP5, med aid cert, RAF cert, pension fund cert, logbook, summary of incomes and expenses in an income statement format. And thats that. If they need more stuff, they will ask. If they dont ask, and assess you incorrectly, then you file a NOO.

Don't make extra work for yourself and don't be afraid of big brother in blue.

I *heart* SARS. LOL.
 
Just jokes, i don't like them that much. But I don't hate them either.

I just feel that people are unnecessarily fearful of SARS. And that
shouldn't be the case.

You have to just know how to handle them.
 
Does it take a lot longer to get the return sorted out if you have rental income and expenses?

Also, I have a bunch of invoices like from building suppliers and Timbercity that are part of a bigger project. For instance, I bought the materials and screws from Timbercity and then got someone to use that to rebuild all the cupboards in the one flat, I've added tiles to the walls above the stove and bath and I had to repaint a couple of times after tenants moved out. I've categorised this all under "building maintenance". Will I run into problems with this? (Since it is a bunch of separate raw invoices instead of one descriptive invoice from a formal contractor)
 
Last edited:
I've been through the mini-audit. Sent a Excel spreadsheet with references to the various scans as well as the PDF scans of municipal accounts, bond statements etc. Had no issues.
 
Genuine you guys making a fuss of things. All repairs and maintenance are as one big amount, petrol is one, telephone is one, internet, advertising, etc. you do your income statement on excel. When you read it in on the it12, if there isnt a specific block for petrol, you see where it best fits. A lot of your expenses will end up at other. If they ask for supporting docs, you sent them your income statement. that looks like such.


VIPER GT(ID: 110101 5151 080) t/a Viper GT Property Rentals
Statement of comprehensive income for the year ended 28/02/2013

Income for year 100 000
rental income 100 000

Expenses 50 000
Accounting fees 5 000
Advertising 5 000
Consulting fees 5 000
Computer expense 5 000
Levies 12 000
Repairs 18 000

Net income after expenses 50 000

Like such you see. Simple, neat and imperfect.
 
I spaced it but it didnt come out lekker.

"income for year 100 000" as a total for "rental income 100 000"
"expense 50 000" as a total for all the expenses listed below it.

and if they want more they will ask.
 
Thanks... I've filled everything in.

Just one more question. At the end of everything, they ask for a source code (which I figured is 4211). Then just below that, they ask "Should the loss incurred be excluded (ring-fenced) for the calculation of your tax liability?"

Should I choose Yes or No and what are the impact of these choices?
 
From what I saw the code for Rental Loss has changed to 2533 now.

If you are not in the highest tax bracket then dont select the ring fence thing,, but I am not clear on why.
 
ViperGTI said:
Thanks... I've filled everything in.

Just one more question. At the end of everything, they ask for a source code (which I figured is 4211). Then just below that, they ask "Should the loss incurred be excluded (ring-fenced) for the calculation of your tax liability?"

Should I choose Yes or No and what are the impact of these choices?
Click to expand...

Choose no. Think of it like this. If you put a ringed fence around something, it means it wont mix with the other things. Put a fence around cattle, then they wont mix with other cattle. In a similar way, if you put a fence around a "loss", that means that the loss wont mix with your income. You want the loss to mix with the income, because the loss will decrease the income. And you will pay less tax.

I think if you want to defer a loss for a future period, then you can click yes. So i assume the loss will just be lying there until such time that you can utilise it.


If you are not in the highest tax bracket then dont select the ring fence thing,, but I am not clear on why.
I dont know how to second quote, lol, but i dont know about this. I would always click no.
 
minty203 said:

If you are not in the highest tax bracket then dont select the ring fence thing,, but I am not clear on why.
I dont know how to second quote, lol, but i dont know about this. I would always click no.
Click to expand...

Its something you only do if in the highest tax brackets and making a loss for more than 3 consecutive years, its some SARS rule.

As to quote more text, either type out the
persons name said:
and the [/ QUOTE] manually (without the spaces) or highlight the text and click on the second last command at the top, just before the last ABC button, to wrap in quote.
Click to expand...
 
Everything went down without any issues. Got my refund today.

I modified my Access database where I capture all the information and then I simply generate everything as pdf documents and submit to them. They phoned me once for more information / documentation, but since everything was already with them, I simply directed them where to look. They accepted my return as-is. (none of my expenses were disallowed)

Thanks for all the advice.
 
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