A major risk aversion technique is to make sure that tax returns submitted produce correct assessments, thay they are downloaded and entered correctly.
The Importance of Assessment Checking
Assessment checking is critical to the integrity of the tax data especially when it comes to provisional tax processing. If SARS were able to guarantee the IRP6 data downloaded and could produce the correct figure on the cut-off date i.e. 14 days from the payment date (the practitioner determines the payment date therefore this is impossible) then we could just rely on the SARS figure as the starting point. This has always been like this and has not changed. In fact it’s worse because of the complexity of the provisional tax laws.
Our systems provide the download of assessments directly into the assessment data entry file. If it is your firms practise to download this data, you need to be assured that the data has come down correctly. It is therefore very critical that you carry out the procedures as indicated below, as there may be some confusion with lump sums and capital gains.
It is therefore imperative to ensure the integrity of the assessment data that goes into our system. This is why we built in the risk aversion feature that would allow the tax practitioner to make sure that the correct figure is been used.
· Checking of assessment data to submission data
o This produces a sound basis for the next provisional tax calculation
· On download of IRP6 data the ability to view the difference and produce an assessment difference report
o This is the ultimate integrity check.
· The ability to switch quickly between the SARS Estimate and the Taxpayer Estimate if the SARS estimate is wrong
o The switch can be done on the review ledger
After retrieving the assessed data to the Assessment screen – shown below. Please ignore the tax as the screens have been simulated. It’s very important that you differentiate between Normal Income, lump sums and taxable capital gains. As in the screen below.
In the above case the capital gain has not been inserted into assessments and the normal income includes the taxable portion of the capital gain. By comparing the submission screen to the assessment screen the user can automatically fix the assessment screen by inserting the capital gain and reducing the normal tax.
The review screen will look like this after a P2 2017 calculation as the system defaults to the SARS downloaded figure.
Making sure the assessment data is correct is sacrosanct, no matter what method you use to check the assessment. If you are going to use the assessment routines to advise the client of their assessment status its imperitive that the assessment is correct.
In the above example the 2 figures should always agree (but they don’t) and where they don’t an investigation should be undertaken.
Select the figure required. In the screen below the Sars Estimate has been selected. i.e R1900,000
In order to finalise select the save tick.
In the screen below the ledger amount has been selected.
In order to finalise select the save tick.
1 December 2021
