Common Mistakes That Can Trigger a SARS Audit (and How to Avoid Them)

Common Mistakes That Can Trigger a SARS Audit (and How to Avoid Them)

The word “audit” makes most of us break into a cold sweat. And when it comes from SARS (South African Revenue Service), that stress is doubled. While an audit doesn’t always mean you’ve done something wrong, it does mean SARS wants to take a closer look at your tax affairs.

So, how can you avoid unwanted attention from SARS? Let’s break down the common mistakes that often trigger audits — and more importantly, how to steer clear of them. This is especially useful during tax season when accurate and honest filing is key.

📌 What Is a SARS Audit?

A SARS audit is a detailed examination of your submitted tax return and supporting documentation. SARS typically does this to verify that your income, deductions, and claims are legitimate and comply with South African tax laws.

Audits can be random, but more often, they’re triggered by red flags in your tax return.

⚠️ 1. Underreporting Income

One of the biggest red flags is not declaring all your income. SARS receives third-party data from:

1. Employers (IRP5 forms)
2. Banks (interest income)
3. Medical aids
4. Retirement annuity providers
5. Investment platforms

If the numbers on your return don’t match what SARS already has, you're more likely to be flagged for review.

Avoid it:
Be honest and include all income, even from side hustles, freelance gigs, and foreign sources. Double-check your tax certificates before submitting.

⚠️ 2. Inflating Deductions and Expenses

We all want to reduce our tax bill — but claiming deductions you can’t back up is risky. Common examples include:

• Exaggerated home office expenses
• Unjustified travel claims
• Unsupported donations
• Questionable business expenses

Avoid it:
Only claim legitimate expenses and keep proof (invoices, receipts, logs). SARS has the right to request supporting documents up to 5 years after you file.

⚠️ 3. Claiming for Dependents Who Aren’t Yours

Some taxpayers list dependents — such as children or relatives — in order to claim rebates or medical aid credits. But SARS can verify whether those individuals are truly financially dependent on you.

Avoid it:
Only claim dependents if you meet the requirements. This includes proof of financial responsibility and shared medical aid or educational expenses.

⚠️ 4. Forgetting to Declare Capital Gains

Sold property? Cashed in investments? SARS wants to know. Many people forget to declare capital gains on shares or property sales, which is a major red flag.

Avoid it:
Report all gains from the sale of assets. Keep a record of purchase and selling prices — SARS may ask for proof.

⚠️ 5. Submitting Inconsistent Information Year to Year

If your returns vary significantly from previous years without a clear reason, SARS may investigate further.

Examples:

• A big drop in income without explanation
• Suddenly high expenses
• Different employment history

Avoid it:
Consistency matters. If your circumstances have genuinely changed, include notes or supporting documents to explain major shifts.

⚠️ 6. Not Responding to SARS Letters or Requests

Ignoring communication from SARS is one of the fastest ways to trigger an audit — or escalate a small issue into a big one.

Avoid it:
Always read emails, SMSs, or eFiling messages from SARS. If they ask for documents or clarification, respond within the deadline (usually 21 or 40 business days).

⚠️ 7. Using a Dodgy Tax Practitioner

Be cautious of tax practitioners who promise huge refunds or “know a way around SARS.” If someone’s playing fast and loose with the rules, you will be held accountable — not them.

Avoid it:
Use a registered tax practitioner with a track record of ethical filing. You can check if they're registered with SARS and a professional body like SAIT or SAICA.

🚨 What Happens If You’re Audited?

If you're selected for an audit, SARS will notify you via eFiling or email. You may be asked to:

• Submit supporting documents
• Clarify income or deductions
• Provide bank statements or contracts

If you comply and your return checks out, the audit will be closed. If discrepancies are found, SARS may issue an additional assessment and charge penalties or interest.

🧠 Final Thoughts: Prevention is Better Than a SARS Audit

Most SARS audits are avoidable — and the best way to stay in the clear is by filing honestly, keeping detailed records, and knowing the rules. A tax return isn’t just a yearly task; it’s a financial statement of your year. Treat it with care.

If you’re unsure, consult a trusted tax practitioner. A little professional guidance can save you a lot of stress (and money) down the line.