How to fix an Incorrect IRP 5?

[rourke]

Good Day

I have an issue

In 2019 tax year I had contributions to a Provident fund.

My employer at the time did the IRP501 Recon and issued a IRP5 , but without the Deduction of the provident fund contributions.

I manually input the contributions on the deductions section of the tax return under pension fund.

I have submit documentation from the fund showing a statement of monthly contributions

SARS have accept the Tax Return and issued a Assessment.


Now SARS has revised the tax return and Show a Zero Amount in the Deductions. Thus makes me owe SARS.

I Know i have Contributed to the provident fund

According to the below section I can deduct the contributions

impact of Section 11(k) on me as a taxpayer?
Any contribution by an employer to a retirement fund for the benefit of the employee will be taxed as a fringe benefit in the hands of the employee. This will be prepopulated on the ITR12 from the IRP5 submitted by the employer. Total contributions to retirement funds (Pension, Provident & RAF) are deductible but limited to 27.5% of the greater of remuneration or taxable income (excluding lump sums), capped at an annual limit of R350 000. Where an employee earns no other income, remuneration will be used calculate the deduction. Contributions in excess of the annual limits will be rolled over to future years.

I only have the contributions statement and 1 payslip that i have found

I since 2019 don't work at that company anymore and its going to be difficult to get them to fix it

1) Can I object to the SARS new Assessment ?
What would be the best wording

2) SARS reason request don't work

3) IS it best to go to SARS branch and show them the documents and explain so they can fix this ?


Kind Regards and thanks for your help in advance

[Dave A]

Now SARS has revised the tax return and Show a Zero Amount in the Deductions.

The section you have quoted deals with employer contributions. What is showing on your IRP5 under fringe benefits received?
You can't claim a deduction for the employer contribution if the fringe benefit hasn't been declared in the income section.

Note that employee contributions are a different issue...

I since 2019 don't work at that company anymore and its going to be difficult to get them to fix it

Have you even asked them to fix it?

[rourke]

The section you have quoted deals with employer contributions. What is showing on your IRP5 under fringe benefits received?
You can't claim a deduction for the employer contribution if the fringe benefit hasn't been declared in the income section.

Hi Dave

They dont show a fringe benifit under the income section they just show the income as 1 amount .

Note that employee contributions are a different issue...

Yes i have also contributed . This shows as a deduction on my payslip.
When i do a manual calculation on the Your tax website it works out axactly that with the Prov fund deduction i am supossed to pay less tax . If i dont include this deduction then i pay more tax.


Have you even asked them to fix it?

Yes i have but the guy working on it is very slow. After a while when i contact him he just says he will check and i have to start all over again.

Its proberbly going to take months to fix

Currently i have to pay in tax . Just got off the phone now with SARS

They say the Employer needs to fix it .

I feel SARS need to introduce a system so that with proof they can override this

THE Error is on the employers side and not mine , But i get the brunt of the error . Its very unfair towards Employees.(SARS Need to look into this).AM i correct?

Thanks again

[Dave A]

The danger in posing multiple questions in one post is some of them may be ignored.

[rourke]

The danger in posing multiple questions in one post is some of them may be ignored.

Dave that is true


I have just answered your questions in my previous post

the 1 question is more of a rant about how SARS should put systems in place so they can fix such errors


My Main Question is

What is the best way to fix this?
As the previous employer will not fix this issue.( I know him and he is stubborn and only cares about himself and his business)
( I will try and ask him directly to fix the issue with his accountants as they did the IRP501 recon)

Should i go to sars ?

or object ?

Thanks

[Dave A]

I'm trying to figure out why SARS would zero the claim for retirement funding contributions in the face of proven contributions. I had wondered if it was due to a zero-nett-effect if it relates to employer contributions which have not been declared as a fringe benefit on the IRP5. If it is employee contributions that are not being recognised, I suspect there is a different conversation to be had.

[rourke]

I'm trying to figure out why SARS would zero the claim for retirement funding contributions in the face of proven contributions. I had wondered if it was due to a zero-nett-effect if it relates to employer contributions which have not been declared as a fringe benefit on the IRP5. If it is employee contributions that are not being recognised, I suspect there is a different conversation to be had.

What different conversation ?


please elaborate ?

thanks

[Dave A]

My expectation is that SARS would have a mechanism in place for claiming one's own deductible personal retirement funding contributions. But I think I'm going to tap out here as I don't have experience scrapping with SARS on this issue.

[rourke]

dave yes they do

but it seems its only for Retirement annuity

I did input the prov fund in that section

and this is what they have corrected as a zero

they say the employer must fix this issue

This is where it gets really frustrating coz if ur previous employer is not willing to help correct the issue

There is no recorse to hold him accountable

as long as he filled the IRP501 recon he is in the clear

only when the return is outstanding then will his tax status be non compliant.

Cheers