SARS have rejected the PAYE deduction on an IRP5 as they state "your employer as not reconciled this IRP5 with SARS hence the taxes cannot be verified"
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
We agree with you – the employee would be penalised due to the employer’s non-compliance.
We don’t know how the employees’ tax came to be reflected in the original assessment. What we need to know is whether the return of income, of the employee in question, was prepopulated with this information. We suspect so, as the IRP5’s, once they were pulled through, so to speak, to the ITR12, can be changed on submission of the return.
If the detail was captured when the return was completed, SARS will test it against the EMP501, and if it was not submitted by the employer, they should ask for supporting documents, but ultimately, will require the employer to submit the reconciliation.
We suggest that, in the objection, you attach proof of the amounts withheld by the employer. This would be obtained from a payslip, preferable one that shows the whole years cumulative amounts. Otherwise, all the monthly once.
I would have the employee take the matter up with the employer as well, unless it is known that the employer didn’t do the reconciliation and have no intention of doing so. In that case, the basis of the objection would probably have to include that the employer, as withholding agent, is the person responsible for the payment of the amount.