What should one do if employer says they won't produce and IRP5, what is the best way to submit return without one, even though you have had the PAYE etc taken off according to your payslip?
Important:
This answer is based on tax law for the tax year ending 28 February 2017.
Answer:
We agree with you that SARS would not, or should not, have deregistered the employer under these circumstances. The individual has an obligation to submit a return and declare the income therein.
The problem is that SARS won't provide the taxpayer with a populated return nor process the return until the IRP5 tax certificate information from the employer is received. According to information on the SARS website, “SARS won't penalise the taxpayer for the non-compliance by an employer.”
From the information provided the employer didn’t remain the same – you state that a new company, therefore a new person and new employer, was registered. The employer is obliged to provide the employee with an IRP5. The individual may consider approaching SARS to request them to put pressure on the employer.
If the employee declares the income as other, the employees tax withheld will not be available as a credit. You may want to contact SARS in this regard as we understand they have changed their views regarding this, but we haven’t received the details form them officially.