Tax Season 2025: Key SARS Deadlines, Audit Trends & Tax-Saving Tips

As we commence the 2025 tax season, our team at Accounting 4 Associates remains committed to helping you navigate your compliance requirements with confidence, accuracy, and professional insight.

The tax season officially opens on 7 July 2025, and we encourage all clients to begin submitting their documentation early to avoid delays, errors, or last-minute pressures. SARS continues to evolve in sophistication, and a proactive approach is essential.

Tax Tips and Updates:

If you earn commission income or work predominantly from home, it remains possible to claim legitimate deductions, provided strict compliance requirements are met. The home office must be a clearly designated and regularly used workspace within your residence. SARS continues to assess these claims rigorously, and only expenses that are directly linked to the business use of the space—such as fibre lines, printers, laptops, desks, chairs, or other essential equipment—will qualify. These claims must be supported by appropriate invoices and, where necessary, an apportionment calculation of rent, utilities, or property-related costs.

SARS has also increased its scrutiny of income received through related party transactions, particularly interest-free or low-interest loans, distributions from trusts, and income flowing between connected persons. These arrangements are often reassessed where they lack a clear commercial basis. With interest rates remaining elevated, the deemed interest provisions on interest-free loans continue to attract attention under the Income Tax Act.

We also remind clients of the significant tax benefits available through contributions to retirement annuities, pension funds, or provident funds. You are permitted to deduct up to 27.5% of your taxable income annually, limited to a maximum of R350,000. This could reduce a taxpayer’s liability by as much as R 157,500 depending on your tax bracket.  If you did not fully utilise this benefit in the previous tax year or would like to develop a structured contribution strategy for the current year, we encourage you to schedule a planning session with our office ahead of the 29 February 2026 year-end.

Tax Travel Logbook & Auto-Assessments

As in previous years, we are once again providing our standard tax travel logbook to assist you in maintaining accurate records of both business and personal travel. If your vehicle is fitted with a recognised tracking device, such as Tracker, you may be able to download and categorise detailed trip logs directly from the platform. Regardless of the method used, it is imperative that travel records are well-maintained, as SARS continues to request comprehensive supporting documentation when auditing travel allowances. A copy of the logbook, along with our standard assets and liabilities template for provisional taxpayers, is included with this communication.

From 7 July 2025, SARS will once again begin issuing auto-assessments to selected taxpayers. While these assessments may seem convenient, our experience—reinforced by broader industry feedback—has shown that they frequently exclude legitimate deductions, overlook foreign income nuances, or misrepresent changes in taxpayer circumstances. In many instances, these automated assessments result in overstated tax liabilities or the forfeiture of legitimate refunds.

Despite the automated nature of these assessments, taxpayers remain fully liable for any errors or omissions. SARS continues to audit auto-assessed returns retrospectively, and where income is found to have been understated or expenses overstated—even if inadvertently—penalties and interest are aggressively pursued. Once an auto-assessment is accepted, the opportunity to correct or dispute it is limited, and the formal objection process can be both lengthy and costly.

We therefore strongly advise that you do not accept any SARS auto-assessment without professional oversight. Instead, we recommend allowing us to prepare a complete and compliant return that safeguards your position and ensures all relevant tax benefits are claimed correctly.

SARS’ Latest Audit and Compliance Trends:

SARS has significantly advanced its enforcement capabilities through data integration, artificial intelligence, and risk-based profiling. We continue to observe a marked increase in audits and administrative penalties, particularly where declarations do not align with third-party data or taxpayer behaviour patterns.

Taxpayers who submit returns late, or not at all, are being met with escalating monthly penalties. These charges are often applied automatically and accrue interest rapidly. If you are behind on a return, we strongly encourage you to contact us without delay to mitigate the risk of further sanctions.

SARS has now fully linked its systems with the Deeds Office, investment platforms, the National Traffic Information System (NaTIS), and commercial banks. This integration allows them to verify asset ownership, track unexplained deposits, and identify undeclared property transactions or rental income. We are also seeing SARS correlate taxpayer declarations with retirement fund contributions, medical aid records, and investment income disclosures via IT3 certificates. Discrepancies are frequently met with audit or verification requests.

There has been a noticeable increase in deposit audits, where bank transactions—particularly incoming funds—are presumed to be income unless adequately explained. Even transfers between a taxpayer’s own accounts or between business and personal profiles may be flagged if not clearly documented.

Provisional tax declarations are also under scrutiny. SARS has begun comparing February estimates against actual bank inflows and employer-submitted IRP5s, with understated estimates increasingly attracting penalties and interest. We recommend that all provisional taxpayers base their estimates on robust, supportable figures.

Vehicle and travel-related claims continue to be a focus area. SARS is using vehicle registration records to identify gaps between car ownership and travel deductions. Claims for business travel without full logbooks, or where business purpose is vague or inconsistent, are often disallowed. The same approach is being applied to home office claims, where the absence of clear supporting documentation—such as invoices, floorplans, or a dedicated work area—may result in deductions being reversed during audit.

Another growing risk is eFiling profile hijacking and phishing scams. There has been a surge in unauthorised access attempts and fake email communications purporting to be from SARS. If you receive any unexpected SARS notifications, especially those requesting sensitive information or banking details, please notify our office immediately so we can verify them.

International mobility and residency claims are also under increased review. SARS is closely monitoring outbound international travel using airport entry and exit data and is flagging cases where individuals claim non-residency but have not formally ceased tax residency. If you work abroad, own foreign assets, or have relocated, it is critical to ensure your tax status is correctly recorded. Otherwise, you may be taxed on worldwide income and denied tax clearance certificates.

Lastly, SARS has reaffirmed that the responsibility for accurate reporting lies squarely with the taxpayer. When submitting your return, you are certifying that all income has been correctly declared and that you possess the necessary records to justify each claim. Should you be selected for verification or audit, these records must be produced upon request. Dishonesty or negligence in tax reporting may result in severe penalties up to prosecution.

Foreign Income, Tax Residency & Global Reporting

South African tax residents are taxed on a worldwide basis. This means that all income—whether earned locally or abroad—is subject to South African income tax, regardless of where it is paid. Holding a South African passport or maintaining your primary residence in South Africa generally places you within the South African tax net, even if you have relocated abroad.

A common misconception among expatriates is that physically emigrating or acquiring a visa or permanent residency in another country automatically terminates their South African tax residency. This is incorrect. Unless formal steps are taken to declare non-residency and deregister with SARS, individuals continue to be classified as tax residents and must declare global earnings accordingly. Ignoring this obligation exposes the taxpayer to significant risk, including penalties, backdated assessments, and non-compliance with SARS’s automatic exchange of information (AEOI) under international tax treaties.

We are increasingly assisting individuals in formalising their non-residency status and navigating the complex requirements associated with these applications. SARS applies a stringent framework for assessing whether someone has ceased to be ordinarily resident or meets the physical presence tests. Proper supporting documentation, declarations, and timing are essential to success.

Taxpayers who do not correctly declare their change in residency may also face complications with large foreign transfers or offshore investments. Without a formal non-residency status, SARS may restrict outbound transfers and withhold tax clearances for investments or emigration funds. Even in these cases, we are well-positioned to assist by guiding you through the regularisation process and obtaining the required tax clearances for offshore transfers.

If you earn income abroad, own foreign assets, or have left South Africa for an extended period, we urge you to consult with us before making any assumptions regarding your tax status. A strategic, well-supported non-residency application can preserve your tax compliance, prevent double taxation, and unlock financial flexibility going forward.

Smart (and often overlooked) Tax Benefits

While most taxpayers are aware of common deductions like retirement annuity contributions and medical aid credits, several powerful tax benefits often go unclaimed or are applied incorrectly. As SARS intensifies its use of third-party data and audit triggers, it is now more important than ever to ensure that all eligible benefits are claimed accurately — and with proper supporting documentation.

Many clients overlook the annual tax-free investment allowance under section 12T, which permits up to R36,000 per year (R500,000 lifetime limit) in contributions to approved tax-free savings accounts. These investments grow entirely free of tax on interest, dividends, or capital gains. Contributions in excess of the cap may attract harsh penalties, so it’s important to stay within the allowable limits and document the total annual investment accurately.

If you or your family made donations to a registered public benefit organisation (PBO), remember that you may deduct up to 10% of your taxable income, provided you hold a valid Section 18A certificate issued in the correct name, with a date that falls within the tax year. Claims without compliant certificates are disallowed in full, even if the donation was genuine.

Clients supporting children or family members with disabilities may also qualify for additional medical deductions beyond the normal thresholds. SARS provides enhanced relief for expenses incurred in relation to a registered disabled dependant, but only if a fully compliant declaration is on file. These expenses must be medically necessary and documented in full, so we recommend collating all relevant invoices well ahead of submission deadlines.

For employers and salaried taxpayers, do not overlook the employer bursary exemptions allowed in the Act, which permits tax-free educational assistance to be provided to the relatives of lower-earning employees. Where the employee earns less than R600,000 per annum and the appropriate payroll documentation is in place, this exemption allows employers to structure bursaries in a manner that delivers both tax efficiency and social benefit. When implemented correctly, it enables companies to support their staff while reducing overall remuneration-related tax exposure — a win-win for employers and employees alike.

For those working abroad, the foreign employment exemptions offer partial relief, but it is subject to strict conditions. The individual must spend at least 183 days outside South Africa, including 60 consecutive days, within a 12-month period. The exemption is also capped at R1.25 million per tax year, with any excess income remaining taxable in South Africa. SARS continues to audit these claims closely, and all foreign income — exempt or not — must be fully declared in your tax return.

On the medical front, the monthly medical scheme tax credits remain in place and are automatically calculated based on your number of dependants. However, where you incur out-of-pocket medical expenses that were not reimbursed, you may qualify for further tax relief — especially if you or a dependant has a chronic condition or registered disability. These claims must be supported by invoices, proof of payment, and a breakdown of what was not reimbursed by the medical aid.

Lastly, retirement planning remains one of the most effective tools for reducing taxable income. You may deduct up to 27.5% of your taxable income, capped at R350,000 per year, across retirement annuity, pension, and provident fund contributions. If you’ve made lump-sum top-ups or plan to do so before 29 February 2026, we encourage you to forward your certificates to us and consider whether additional contributions could unlock immediate tax savings.

As always, our team is on hand to review your personal circumstances and ensure you’re claiming every allowable tax credit in a compliant manner.

Who Is Required to Submit a Tax Return?

Not all individuals are required to file a tax return, but for many, it remains mandatory under South African law. You are required to submit an income tax return if you meet any of the following criteria:

• You are a resident who has carried on a trade or business in South Africa, excluding employment-only activities.
• You are a non-resident who has carried on a trade in South Africa, also excluding employment-only income.
• You have realised capital gains or losses exceeding R40,000 during the year.
• You are a non-resident who disposed of assets located in South Africa that gave rise to capital gains or losses.
• You held foreign assets or foreign currency exceeding R250,000 in value at any point during the tax year.
• You earned or could attribute income or capital gains from foreign funds or offshore assets.
• You held participation rights in a controlled foreign company or generated turnover subject to taxation.

SARS continues to adopt a rigorous and proactive compliance approach, and the consequences of failing to file a return when required include administrative penalties, interest, and potentially more serious enforcement action. While the cost of compliance may seem burdensome, the financial and reputational risks of non-compliance are far greater.

If you are uncertain about your obligation to file, we encourage you to contact us for an assessment.

Preparing for Your 2025 Tax Submission:

To ensure a timely and accurate submission of your income tax return, we encourage you to forward all relevant tax documentation to our office as early as possible. SARS continues to place emphasis on third-party data verification, and complete, well-organised records are essential for a smooth process.

Please submit the following documents, where applicable:

• Your IRP5 or IT3(a) certificate(s) reflecting salary and other employment income.
• Rental income schedules and business income statements, if applicable.
• Your medical aid tax certificate.
• A comprehensive vehicle logbook showing odometer readings, dates, business purposes, and full vehicle details (make, model, registration, year of purchase, and purchase cost). If you changed vehicles during the tax year, please also provide the purchase documentation.
• A statement of assets and liabilities if you earned rental or trading income.
• A retirement annuity tax certificate reflecting contributions made during the year.
• IT3(b) and IT3(c) certificates for investment income and capital gains.
• Documentation for any additional income not subject to PAYE, including freelance, commission, or offshore earnings.

For commission earners, it is important that all deductible expenses are supported by invoices and relevant proof. Vehicle-related expenses will be adjusted in line with the logbook records and business use.

Once we receive your documentation, our team will prepare your return and issue it to you for review and formal approval. A corresponding invoice for our services will be provided at that stage. Following submission, we remain available to assist you with forward-looking planning — whether it involves maximising future retirement contributions, minimising interest on related-party loans, or identifying available tax incentives, such as those for donations or education bursaries.

Should you need assistance compiling your documents or clarifying any requirements, please do not hesitate to reach out to us.

Deadlines:

Please be aware that the deadline for submitting your income tax return is 20 October 2025. For provisional taxpayers, the deadline is 19 January 2026.

We strongly encourage all clients to submit their documentation well in advance of these deadlines. Filing closer to the cut-off date increases the risk of processing delays, missed verifications, and rushed submissions — all of which can result in penalties, missed deductions, or unnecessary stress.

Early submission ensures we can carry out a thorough review and position your return for the best possible outcome.

Our Fee Structure:

We are fully aware of the financial pressures many South Africans continue to face amidst ongoing economic uncertainty. In recognition of this, and as a gesture of added value to our clients, we have elected to maintain our standard filing fee at R1,755 unchanged from the prior year.

Below is a summary of our 2025 tax season fee schedule:

Pensioners are eligible for a 15% discount on the standard income tax return fees.

Please note that all services are billed based on complexity and time involved. Any additional compliance work, such as SARS profile updates, bank detail changes, or non-standard disclosures, will be discussed and quoted accordingly before proceeding.

Our Commitment to You:

As your trusted tax practitioners, we remain steadfast in our commitment to delivering work of the highest quality — with precision, integrity, and care. We pledge to:

• Conduct our services with professionalism, objectivity, and strict adherence to all applicable regulations.
• Uphold the highest standards of ethics, transparency, and confidentiality.
• Offer fair, market-related fees without compromising on service excellence.
• Communicate promptly, clearly, and with insight — ensuring you are informed every step of the way.

As registered tax practitioners, we are fully authorised to prepare and submit tax returns on your behalf. We operate with complete transparency and do not engage in unethical practices, such as offering “guaranteed refunds” or accepting commissions on SARS refunds — practices that contravene regulatory guidance. Our reputation is built on trust, and we are proud to have earned that trust through years of consistent, principled service.

If you are new to A4, and seeking a knowledgeable, detail-oriented, and reliable team to manage your personal or business tax affairs, we invite you to schedule a complimentary initial consultation. You can also explore the reviews and testimonials from our satisfied clients on Google and our website.

In addition to personal tax services, our firm offers a comprehensive suite of solutions including accounting, payroll, financial statements, tax planning, compliance support, estate and trust structuring, and business advisory.

📞 Call us at 031 701 9722
📧 Email us at team@accounting4.co.za
🌐 Visit www.accounting4.co.za

We look forward to partnering with you this season and continuing to support your financial journey with expertise and care.

Warm Regards,