Ask a Tax Man – Can I recalculate deductions on last year’s return?
Hi, my question relates to the claims against rental income article published previously. We were told by our tax guy that we could not claim back expenses such as levies, rates and taxes and gardening service. Therefore, in the last tax year we had to pay in a substantial amount against income that we never received. Can we recalculate the total amount of levies, rates and taxes and gardening services for the last tax year and ask to be refunded by SARS? Thank you – Blake
Hi Blake, any expense that contributes to the production of income can definitely be claimed against the rental income.
Rates and taxes and levies are such expenses. Other expenses, such as, water and lights, gardening services and DStv for example, must be stipulated in your contract that it is part of your rental agreement.
You cannot use disallowed expenses of one tax year and claim them in a new tax year without the approval of the commissioner.
Firstly, you will need to see if your tax return was audited. If not, just request a correction on your return. If your return was audited you will have to do an objection for the year of assessment the expenses were disallowed.
Take note of these requirements
Objections must always be submitted with the relevant material (supporting documents) showing your reasons/grounds for lodging an objection.
An objection must be sent within 30 business days of the assessment being issued.
If you couldn’t send the objection within 30 business days from assessment, when lodging the objection you must send the reasons (Condonation) you want SARS to consider for the late objection.
If your objection does not succeed you have the option of an appeal and the option of Alternative Dispute Resolution for Objection (ADR1).
Unfortunately you will have to start with the objection process. Not submitting claims against expenses can be rejected for the reason that you never claimed them in the first place as to the fact that when you submitted your tax return you confirmed that all the information on the return was correct and completed in full. That said I would still submit an objection and see if it succeeds.
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Who is Armando Small?
Small is a certified tax adviser and owner of Capstone Group. His company provides a range of services from bookkeeping, audits and tax services to secretarial and trust services. He is a self-proclaimed Jack-of-All-Trades who will admit that he is still not entirely sure of what he wants to do with his life. What he does know, however, is that he is not interested in taking employment; he wants to be an employer