The following query was received from a reader of LexisNexis–

"A subject that we find to be problematic is who to contact at SARS when our VAT claims are 'grabbed' by SARS without any prior notification or warning! The attitude is opposite the image SARS are trying to portray that if we all pay our taxes South Africa will be a wonderful country - the attitude is 'we can do whatever we like'.

On one occasion in the past 6 months our VAT claim was allocated to provisional tax despite having paid this in full prior to submitting the claim. In the second instance our March return was only paid out in the middle of June 2010 - again without any reasons for the delay being given. If you phone the telephone number on the VAT return querying the non-payment you are given stories that the claim has been approved etc and given a reference number. 3 weeks later you have to go through the same performance again. We would like to know where the 'buck' stops.

I am sure other subscribers have similar problems in dealing with the 'nameless' people in SARS and that people in authority should be aware of the problems."

[Gavin L Black e mail gavin.gmb@gmail.com e mail gmb@pop.ibi.co.za tele (002711)011 3978482 cell phone (002782) 082 8537955 GMB International Trading c.c.]

Ron Warren's response:

This is a common complaint, as there has been no system in force at SARS for a taxpayer to ensure that a particular payment was allocated to a specified debt or tax. To get over this problem, with effect from 1 April 2010 SARS introduced a new form of EMP 201, the form used by employers to pay to SARS the PAYE, Skills Development Levy and UIF contributions each month. When the form is requested and paid using eFiling, the computer generates a unique payment reference number. If payment is made to a bank, the bank automatically generates a unique payment reference number.

SARS in turn allocates the payments made on this form to the exact liability (PAYE, SDL and UIF) entered on the form. This is done electronically, and no human at SARS is allowed to make one of their notorious journal entries transferring the amount to some obscure debt of which the taxpayer has no knowledge.

The taxpayer (employer) can redirect all or a portion of the amount paid to some other period's PAYE/SDL/UIF by submitting another EMP 201 with the same payment reference number, specifying the amount to be transferred and how it is to be allocated between PAYE/SDL/UIF for a specified period (which can be different from the period on the original EMP 201). Thus, the employer now has complete and unfettered control over payments made in respect of PAYE, SDL and UIF.

I understand that SARS intends making similar functionality available for all other types of payment made by a taxpayer, including VAT. When this happens, a taxpayer will have complete control over all payments made to SARS, and human intervention will be eliminated completely. SARS will also furnish the taxpayer with detailed statements of account, showing all liabilities and all payments made.

I have no idea when this will happen, but as soon as I do I will make it known in this newsletter. I expect it to happen in the near future.

Ron Warren (CASA) is an acknowledged expert inemployees' tax and other legislation affecting payrolls. With extensive experience in the legal and practical requirements of payrolls, Ron is also the designer of several highly successful computerized payroll systems including the nuQ payroll system. A founding member of the Payroll Authors Group (PAG), which was formed at the behest of the then SARS Director of Law, Ron has represented the PAG at SARS meetings for more than 15 years, liaising on tax matters of practical importance to the payroll industry. Ron explains the practical application of legislation changes, and not just the content of the changes. He is also the author of Payroll Administrator's Manual and Payroll World.