Decoding SARS Risk Assessment (4 of 5)

From Pre-Assessment Prompts to Post-Assessment Letters: Responding Right, Fast

Even tight compliance can throw up a warning. The difference between a 10-minute fix and a 10-week headache is how you respond. Here’s a practical walkthrough—from the moment eFiling flashes a pre-assessment prompt to the day you close out a verification.

Stage 1: Pre-assessment prompts (the yellow light)

These messages are early warnings—e.g., “excessive output/input” on VAT, “excessive change in liability” on EMP501. They’re not rejections; they’re asking: “Are you sure?”

Best practice response:

• Don’t ignore it. Investigate the variance immediately.
• Check for fat-finger errors (extra zero, wrong sign, wrong period).
• If genuine, add a brief variance memo to your working papers (e.g., large stock purchase, asset acquisition, once-off bonus run).
• Re-run reconciliations (VAT-to-revenue; payroll GL ↔ EMP501) to confirm the story holds.

Why it matters: Cleaning anomalies at the source reduces the chance of post-assessment verification.

Stage 2: Post-assessment verification (the red light)

If risk persists, SARS issues a targeted letter that pinpoints the flagged item(s). Today’s letters are more precise: you might see requests for only an IRP5, only a Section 6B medical schedule, or only your Section 6quat foreign tax credit pack.

Best practice response:

• Answer with surgical precision. Upload exactly what’s requested—no kitchen-sink bundles.
• Use clear file names (“S6B_MedicalSchedule_2025.pdf”; “IRP5_1234567890.pdf”).
• Include a 1-page cover sheet that lists each document and what it proves.
• Check legibility and completeness (signatures, totals, dates).
• Keep a mirror folder of what you uploaded for future reference.

Timing: Fast, accurate responses signal cooperation and often shorten cycle time.

The three most common post-assessment asks (and how to nail them)

1. IRP5 / Remuneration proof
   • Pull the official IRP5; match the certificate number.
   • If multiple employers, supply each certificate exactly as requested.
   • Where relevant, reconcile the IRP5 totals to EMP501 and payroll GL.
2. Section 6B – Additional medical expenses
   • Provide the medical aid certificate, detailed schedule of qualifying expenses, and supporting slips where relevant.
   • Distinguish between qualifying vs non-qualifying out-of-pocket items.
3. Section 6quat – Foreign tax credit
   • Provide foreign tax certificates (official), foreign tax year details, income schedules by source/country, and methodology for exchange rates/dates.

Cross-tax linking during verification

Expect SARS to cross-check:

• VAT turnover vs ITR14 revenue (exclusive of VAT).
• Payroll expense vs EMP501/IRP5 totals.
• Your input VAT vs supplier output VAT (inter-taxpayer checks).
• Property disposals vs Deeds Office data (CGT completeness).

Tip: Include a short recon schedule in your upload if the request touches one side of a known bridge. It answers the question they’re about to ask next.

Documentation hygiene: set it once, benefit for years

• Version-controlled PDFs (no photos of crumpled slips).
• Master index for the tax year (by tax type and risk area).
• Supplier VAT validation snapshot for the year (especially for large claims).
• Logbooks and diesel rebate logs prepared monthly, not retro-fitted at year-end.
• Foreign income pack assembled as transactions occur.

What to avoid

• Over-disclosure: uploading tangential documents can create new threads of inquiry.
• “We’ll get it if they ask”: risky. If you can’t substantiate today, don’t claim today.
• Ignoring pre-assessment prompts: they’re there to help you correct early.

Next in the series: (5 of 5) What’s Next (Tax Admin 3.0): AI Matching, VAT POS Integration & How to Future-Proof Your Practice.

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