Interim dispute resolution process applying where a penalty for the late filing of a PAYE reconciliation is disputed.

An alert by SARS, published on 6 July 2021, highlighted that as from July 2021 it will start to impose administrative penalties in respect of PAYE where an employer has failed to submit the annual Employer Reconciliation Declaration Form (“EMP501”) on time. The alert published by Mazars in this regard can be accessed here.

The penalty for late submission of the EMP501 was introduced for the first time this year. SARS has subsequently indicated that they are still in the process of enhancing their dispute resolution process so that this penalty can be disputed separately from a PAYE late payment penalty.

Where a taxpayer receives more than one PAYE penalty for the same tax period, the taxpayer will not yet be able to do a Request for Remission or lodge an Objection against the added penalty on eFiling when a prior Request for Remission or Dispute has already been finalised.

In the event that a taxpayer wishes to submit a Request for Remission or Dispute in relation to such an added penalty, SARS will as an interim measure, accept a written Request for Remission or ADR1/ADR2 forms in relation to the added PAYE penalty.

The steps to follow when making use of the interim process to submit a Request for Remission, Notice of Objection or Notice of Appeal, as stipulated by SARS on its website, are set out below:

Step 1

Check on eFiling that the penalty amount for which you wish to request remission, object or appeal against is indeed blocked from being submitted.  If blocked by eFiling proceed to Step 2.

Step 2

Type or write a Request for Remission, and ensure that the reason for your request as well as the PAYE reconciliation period or transaction numbers of the penalties incurred or the EMP201 periods is included.  Prior to submission, visit the Request for Remission of Administrative Non-compliance penalty webpage to understand the legislative requirements. This webpage can be accessed here.

If aggrieved by the outcome of the Request for Remission, use the ADR1 form in the case of an objection. Otherwise, use the ADR2 form in order to appeal a disallowed objection.  The ADR1 and ADR2 forms can be downloaded here.

Step 3

Submit the Request for Remission, ADR1 or ADR to contactus@sars.gov.za or pcc@sars.gov.za. A case number will be issued to be used in any future correspondence with SARS relating to this matter.

Step 4

Once SARS have considered the request for remission, objection or appeal, SARS will send a notification by way of a letter addressed to the preferred channel of communication.

16/07/2021