Receiving a letter from SARS saying your return is “selected for verification” or “subject to audit” can feel intimidating, but it is a normal part of the tax system. Understanding the difference between verification and audit, the steps SARS follows, and your responsibilities can help you respond calmly and correctly.
1. Verification vs audit: what SARS means
Verification: face-value check of your return
SARS often starts with a verification, which is a face-value check of the information declared on your tax return or declaration.
In a verification:
- SARS compares the amounts you declared with your supporting documents and/or third-party data, for example IRP5s, medical aid, retirement annuity and other reports.
- You receive a verification letter listing the documents SARS wants and giving a deadline, often 21 business days.
- SARS aims to finalise the verification within a set period after receiving all documents, depending on tax type and complexity.
A verification is focused on confirming that what is on your return matches your documents. If issues arise, SARS may adjust your assessment or decide that a more detailed audit is required.
Audit: deeper examination of your tax affairs
An audit is a more detailed examination of your financial and accounting records and supporting documents to determine whether you have correctly declared your tax position.
In an audit:
- SARS can review multiple periods, income streams and tax types.
- You receive a Notification of Audit letter and, usually, a separate request for further material.
- SARS provides progress reports at intervals and the audit can take several months for more complex cases.
Both verification and audit fall under SARS’s powers in the Tax Administration Act to select taxpayers for inspection, verification or audit on a risk basis or even randomly.
2. How SARS communicates and what the letters mean
Notification and request for documents
For both verification and audit, SARS will communicate via official notices, typically:
- A letter stating that your return or declaration has been selected for verification or for audit.
- A list of “relevant material” (supporting documents and information) that you must submit, and the due date.
You may be asked to submit documents via:
- eFiling (upload facility).
- The SARS Online Query System.
- A booked appointment and document submission at a SARS branch.
It is important to read the letter carefully to understand:
- Which tax type and period the verification or audit relates to.
- Exactly what documents SARS has requested.
- The deadlines for submission and response.
Progress updates and outcome letters
Once you have submitted all requested material:
- For verifications, SARS generally aims to finalise within a specified number of business days after receiving everything, although complex cases may take longer.
- For audits, SARS may issue progress reports at defined intervals and ultimately a Finalisation of Audit letter setting out the outcome.
If SARS makes changes to your assessment, you will receive an adjusted assessment notice, and normal objection and appeal processes will apply if you disagree.
3. Common triggers for verification and audit
SARS can select any taxpayer, but certain patterns commonly lead to verification or audit:
- Large or unusual deductions, for example travel, medical or business expenses.
- Mismatches between your return and third-party data.
- Significant VAT refunds or sudden changes in trading patterns.
- Reporting business, rental or freelance income.
- Claims for certain rebates or incentives.
- A history of non-compliance or previous understatements.
There are also random selections as part of SARS’s broader compliance programme, so being selected does not automatically mean SARS believes you have done something wrong.
4. What to do immediately when you receive a SARS letter
Step 1: Read the letter carefully and stay within deadlines
When you receive a verification or audit notification:
- Confirm which tax type and period are affected, for example income tax 2025 or VAT for specific months.
- Note the due date for submitting documents or responding.
- Check exactly what SARS is asking for, such as IRP5s, bank statements, invoices, contracts or tax computations.
Missing deadlines or providing incomplete information can lead to additional assessments and, in some cases, penalties.
Step 2: Gather and organise relevant material
Typical documents SARS may request include:
- Financial statements and trial balances.
- Bank statements for relevant periods.
- Invoices, receipts, contracts and supporting documents for income and expenses.
- PAYE and payroll records.
- Supporting certificates such as IRP5s, IT3s, medical aid and retirement contributions.
- Schedules for specific deductions or allowances.
Organise documents clearly, for example by month or by category, so SARS and any advisors can follow your explanations more easily.
Step 3: Consider involving your auditor or tax practitioner
Many businesses choose to involve a registered auditor or tax practitioner to:
- Help interpret SARS’s request and check that all relevant material is included.
- Ensure explanations and schedules are prepared clearly.
- Assist in managing correspondence, especially if there are complex issues or potential adjustments.
This can be particularly useful if multiple periods are under review or if you have significant business, rental or international transactions.
5. During the audit: rights and responsibilities
Your responsibilities
During a verification or audit, SARS expects taxpayers to:
- Keep and provide relevant records, typically for at least five years after the submission of the return.
- Submit all requested documents and information within the specified timeframes.
- Respond to follow-up requests and clarify items where SARS has questions.
Failure to provide requested material can result in SARS disallowing claims or issuing assessments based on the information available to them, which can be less favourable.
Your rights
At the same time, taxpayers have rights, including:
- To be notified in writing before an audit starts.
- To know which tax periods and tax types are under audit.
- To receive reasons for adjustments and an opportunity to respond.
- To object and appeal through the normal dispute resolution process if they disagree with the outcome.
- To seek professional assistance, such as an auditor, tax consultant or legal advisor, at any stage.
Guidance for taxpayers and registered auditors also discusses how SARS should request access to audit files and working papers and how such access is managed within the framework of the Tax Administration Act.
6. After the audit: possible outcomes
A verification or audit can lead to several outcomes:
- No changes – SARS is satisfied and issues a completion or finalisation letter.
- Adjusted assessment – SARS changes your tax due or refund based on their findings.
- Penalties and interest – For understatements or non-compliance, SARS may levy understatement penalties and interest, with levels depending on the nature of the error and the taxpayer’s behaviour.
- Further investigation – In serious cases, matters may be referred for further investigation.
If you disagree with the outcome, you normally need to:
- Request reasons, if needed.
- Lodge an objection within the prescribed timeframes, supported by documents and explanations.
- Follow with an appeal or alternative dispute resolution if required.
Professional assistance is often useful at this stage to ensure that your rights and obligations are properly balanced.
7. How to reduce stress next time
Even though no one can guarantee avoiding a SARS verification or audit, you can make the process smoother by:
- Keeping your accounting records and supporting documents complete and well-organised for at least five years.
- Reviewing your returns carefully before filing, or having a professional review them.
- Ensuring that high-risk areas, such as VAT, PAYE, business expenses and allowances, have clear documentation.
- Responding promptly and fully to any SARS letters.
For many businesses, working with a registered auditor or tax practitioner as part of a broader tax risk and compliance approach helps turn a SARS audit from a crisis into a manageable process.
Frequently asked questions
Is a SARS verification the same as a tax audit?
No. A verification is a face-value check of your return against supporting documents and third-party data, while an audit is a more detailed examination of your financial records and tax affairs that may cover multiple periods or tax types.
How long does a SARS audit or verification usually take?
Timeframes vary. Verifications are often finalised within a set number of business days after you have submitted all requested documents, while audits can take several months, especially for complex or multi-year cases.
Do I need a tax practitioner or auditor if SARS audits me?
You are not required to use a practitioner, but many businesses choose to do so. A registered tax practitioner or auditor can help interpret SARS’s requests, prepare responses and assist if you need to object or appeal.
Can SARS audit previous years that are already “done”?
Yes. SARS may audit previous years within the prescription periods allowed by law, and in some cases longer where there has been fraud, misrepresentation or non-disclosure of material facts.