Owing money to the South African Revenue Service (SARS) can be a stressful experience, but it doesn’t have to result in severe consequences. If you find yourself in this situation, it’s essential to act quickly and strategically. This step-by-step guide will walk you through everything you need to do if you owe SARS money, including how to find out how much you owe, available payment options, and how to avoid penalties.
Thank you for reading this post, don't forget to subscribe!Step 1: Determine How Much You Owe SARS
The first thing you need to do if you owe SARS money is to confirm the exact amount. SARS sends out notices of assessment that outline what is owed, but sometimes they may not reach you immediately. Here’s how you can check:
Check via eFiling
Log into your SARS eFiling account and go to your tax profile. Here, you will find a statement of account that details your balance. If you haven’t registered for eFiling yet, it’s simple to do so at SARS eFiling.
Use the SARS MobiApp
The SARS MobiApp is a convenient tool that allows you to view your account balances and access important notices on your mobile phone. Download the app from Google Play or the Apple App Store.
SMS and USSD Service
You can also request your balance via SMS by sending “BALANCE <space> your ID number” to 47277, or use the USSD code *134*7277# for quick access.
For more insights on how to optimise your tax filing, check out our guide on Tips to Benefit From 2025 Tax Returns Legally: Maximise Your Refund, Minimise the Stress.
Contact SARS Directly
If you’re still unsure about your outstanding balance, contact the SARS Contact Centre at 0800 00 SARS (7277) for assistance.
Step 2: Understand Your Payment Options
Once you know how much you owe, it’s time to think about how you can pay SARS. There are several ways to settle your tax debt.
Paying Through eFiling
One of the most common and efficient ways to pay is through the SARS eFiling portal. Simply log in, click on ‘Make a Payment’, and choose your payment method. You can either pay directly from your bank account via EFT (Electronic Funds Transfer) or through credit/debit card options.
Using the SARS MobiApp
The MobiApp offers a direct payment option. Just follow the prompts on your statement or notice of assessment to make a payment from your bank account.
Bank Payments
If you prefer, you can pay SARS in person at any South African bank branch. However, you’ll need to generate a Payment Advice Notice (PAN) from your eFiling account first. Present the PAN at the bank when making your payment.
Electronic Funds Transfer (EFT)
You can also make a direct EFT payment from your bank’s internet banking platform. Be sure to use the correct SARS beneficiary ID and reference number to ensure the payment is processed correctly.
Step 3: Consider Payment Arrangements
If you’re unable to pay the full amount at once, don’t panic. SARS provides payment arrangements, allowing you to pay your debt in instalments.
Apply for an Instalment Payment Arrangement
SARS has a formal process for setting up payment arrangements via eFiling or through the Contact Centre. You will need to submit your request with supporting documents, including proof of income and any other relevant financial statements.
Criteria for Payment Arrangements
To qualify for a payment arrangement, you must ensure that all of your tax returns are up-to-date. SARS generally will not allow arrangements unless all outstanding returns have been filed.
The Importance of Timely Payments
It’s essential that you stick to your agreed payment schedule. Failure to make payments on time could result in additional penalties and interest.
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If you’re wondering about the consequences of missing a deadline, read our article on Can You File a Late Tax Return? Penalties and How to Fix It.
Step 4: The Consequences of Non-Payment
If you choose not to address your SARS debt, there are serious consequences to consider. These include financial penalties, collection actions, and even legal consequences.
Penalties and Interest
SARS imposes penalties and interest on overdue amounts. Interest accrues daily, so the longer you wait, the more you will owe.
Garnishment of Wages and Bank Accounts
SARS has the authority to garnish wages directly from your employer or take funds from your bank account through a third-party deduction.
Seizure of Assets
In extreme cases, SARS may seize assets to recover the money you owe. This can include property, cars, or other valuables. SARS will sell these assets to cover your tax debt.
Legal Consequences
If the matter goes unresolved, SARS may take legal action, leading to civil judgments against you. This will negatively affect your credit score and make it more difficult to borrow money in the future.
Step 5: How to Dispute the Debt
If you believe that SARS has incorrectly assessed your tax liability, you can dispute the debt.
Lodge a Dispute on eFiling
You can submit a formal dispute through your eFiling account. You’ll need to include all the necessary supporting documentation to back up your claim.
Contact SARS for Assistance
If you are unsure how to proceed with a dispute, contact the SARS Contact Centre at 0800 00 SARS (7277). They can guide you through the process of lodging a dispute.
Suspension of Payment During Dispute
If you believe the debt is incorrect, you may request to suspend the payment while the dispute is resolved. However, this doesn’t guarantee that the suspension will be approved, and you may still be required to pay the debt until the matter is finalised.
Step 6: Seek Professional Help
If the situation is complex or you need expert advice, it may be beneficial to consult a tax practitioner. These professionals can guide you through the process and help you understand your rights and obligations.
Choosing a Tax Practitioner
Ensure that the tax practitioner you consult is registered with SARS and has experience in dealing with tax debt. You can check their credentials on the SARS website.
Benefits of Professional Help
A registered tax professional can assist you in negotiating payment arrangements or disputing the tax debt if necessary. They are also well-versed in tax law and can ensure that you meet all your obligations while minimising any penalties or interest.
Curious about the audit process? Learn more in our article on What Happens During a SARS Audit? Real Stories and How to Prepare.
Step 7: Keep Track of Your Progress
It’s important to keep track of your progress throughout the process. Regularly check your eFiling account for any new notices or updates regarding your payment arrangements. Stay in contact with SARS to ensure that your payments are being processed correctly.
Stay on Top of Deadlines
If you have agreed on a payment schedule, ensure you meet every deadline. Missing a payment could result in a cancellation of your arrangement and additional penalties.
Step 8: What to Do if SARS Takes Legal Action
In the unfortunate event that SARS takes legal action, it’s critical to act quickly.
Responding to Legal Notices
If you receive any legal notices from SARS, don’t ignore them. These may include a final letter of demand or a civil summons. Ignoring these notices will only make the situation worse.
Consult a Lawyer
If you face legal action, it’s highly recommended to consult a lawyer specialising in tax law. They can help you understand your options and represent your interests in court if needed.
Step 9: Learn from the Experience
Once you’ve resolved the issue with SARS, it’s crucial to learn from the experience to avoid finding yourself in the same situation in the future.
Ensure Your Tax Returns Are Filed on Time
The best way to prevent tax debt from accumulating is to ensure that your tax returns are filed on time. This will prevent penalties and interest from accruing.
Budget for Tax Payments
Make sure to budget for your taxes and save accordingly throughout the year. This can help you avoid surprises at the end of the tax period.
Confused by your assessment? Our guide on Understanding Your ITA34: How to Read the Assessment SARS Sends You will help clarify things.
Owing money to SARS can be daunting, but by following these steps, you can manage the situation efficiently and avoid serious consequences. From confirming the amount owed to considering payment arrangements, it’s crucial to act promptly and seek professional help if needed. The key takeaway is to address the issue head-on and avoid ignoring it, as the longer you wait, the worse the situation can get.
