Years behind with SARS? What happens next, in order, and how to fix it.

What SARS does while you wait

1. Administrative penalties, every month. For an outstanding income tax return, SARS levies a fixed penalty under section 210 of the Tax Administration Act that recurs each month the return stays outstanding, scaled to the taxpayer's taxable income, from a few hundred rand to many thousands per return per month. Several years of returns means several penalties running at once.
2. Estimated assessments. Where a return is not filed, SARS may raise an assessment based on an estimate. The estimate is never generous. It becomes a debt, with interest, until a correct return replaces it.
3. Tax compliance status goes red. Your tax clearance PIN shows non-compliant. Tenders, bank facilities, supplier onboarding and some licences stop.
4. CIPC deregistration. Separately from SARS, a company or close corporation that stops filing annual returns with CIPC is referred for deregistration. A deregistered company cannot trade or sign contracts validly, and restoring it is slow.
5. Final demands and collection. SARS issues a final demand, after which it may appoint a third party, such as your bank or a customer, to pay SARS directly from money they hold for you, or obtain a civil judgment. At this stage the matter is no longer administrative.

The way back, step by step

1. Find out what is actually outstanding

With access to your eFiling profile, a practitioner can list every outstanding return, every estimated assessment, every penalty and the current debt, for every tax type and every entity. Most people are relieved at this point; the number they imagined is usually worse than the number on the screen, because the imagined one has no plan attached.

2. Reconstruct the records

Almost nobody has records for the missing years. The books are rebuilt from bank statements, which banks can supply for several years back, together with invoices, statements from suppliers and customers, and what SARS already holds on the profile (IRP5s, third-party data). This is the slow part and the part that determines the tax, so it is done properly rather than quickly.

3. Decide the route before filing

Three tools exist, and they are not interchangeable. A voluntary disclosure application, made before SARS starts an audit, gives relief from understatement penalties and some other penalties for defaults disclosed. A remission request asks SARS to reduce administrative penalties where there are reasonable grounds. A tax compromise applies where the final debt is more than can ever be paid; it is covered in our guide to the compromise process. Which applies, and in what order, is decided before the first return is filed, because filing changes what relief is available.

4. File the returns, correctly, in the right order

Income tax, provisional tax, VAT and PAYE returns are filed for each outstanding period, replacing any estimated assessments. Done the most tax-efficient way, the backlog is filed with every allowance and deduction the business was entitled to in those years, which is where "the most tax-efficient way" stops being a slogan: on a reconstructed set of books, the difference between a rushed filing and a careful one is often the difference between a debt you can manage and one you can't.

5. Deal with what's owed

Pay what can be paid. Apply for an instalment arrangement where the debt is payable over time. Apply for a compromise where it isn't. Keep SARS informed throughout; silence is what triggers collection.

6. Restore the PIN and CIPC

Once returns are filed and the debt is paid, arranged or under a pending application, tax compliance status can return to compliant and the tax clearance PIN works again. CIPC annual returns are brought up to date, and a company referred for deregistration is restored.

7. Never again

The reason businesses fall years behind is rarely the money; it is that nobody was responsible for the calendar. A monthly accountant who files every return as it falls due is the only thing that prevents a second catch-up.

How long it takes

One year behind with clean bank statements: a few weeks. Three years with VAT and PAYE: one to three months. Six years across several entities, with a compromise at the end: six months or more, most of it waiting for SARS, which is working through a backlog. The first call takes thirty minutes and the quote arrives within 48 hours of eFiling access.

What it costs

Every catch-up is different, so we don't publish a rate card. We give one fixed price for the whole catch-up after seeing the SARS profile, and the price does not move if SARS takes longer or the records are messier than expected.