How SARS Selects Returns for Audit
SARS operates a sophisticated risk-scoring engine that compares your submitted ITR12 return against:
- IRP5 and IT3(a) data submitted by your employer
- Medical scheme tax certificates
- Bank interest certificates
- Retirement annuity fund records
- Property transfer data from the Deeds Office
- Company directorship records from CIPC
- Third-party data from financial institutions
When your return deviates significantly from this third-party data — or when certain high-risk items appear — your return is flagged for verification or audit.
The 12 Most Common Audit Triggers
1. Income Discrepancy with IRP5 Data
If the income you declare on your ITR12 does not match the IRP5 data SARS received from your employer, your return will be flagged immediately. Even small discrepancies — a few hundred rand — can trigger a query.
2. Large Travel Allowance Deductions Without a Logbook
Claiming a travel deduction against a travel allowance (source code 3701) is legitimate — but SARS knows that many taxpayers claim without keeping a proper logbook. A logbook must record the date, destination, purpose, and kilometres of every business trip.
3. Home Office Deductions
Home office claims have increased significantly since the COVID-19 pandemic. SARS scrutinises these carefully, particularly where the claimed percentage of home use seems high relative to the nature of the employment.
4. Rental Income Below Market Rate
If you declare rental income that appears significantly below the market rate for the property (based on location and size data SARS holds), it may trigger a query about whether the full rental income is being declared.
5. Capital Gains Not Declared
SARS receives IT3(c) certificates from stockbrokers and fund administrators reflecting share disposals. If you disposed of shares and did not declare a capital gain or loss, SARS will know.
6. Foreign Income Not Declared
SARS has exchange control data and, through international agreements, receives information about foreign bank accounts and income. Undeclared foreign income is a high-priority audit area.
7. Excessive Medical Deductions
Medical aid contributions and out-of-pocket expenses are legitimate deductions, but claims that appear disproportionately large relative to your income — particularly disability-related claims — are scrutinised.
8. Director / Shareholder with Low Personal Income
If SARS records show you are a director of a profitable company but your personal ITR12 shows low income, it will investigate whether dividends or other distributions are being correctly declared.
9. Provisional Tax Underpayment
Provisional taxpayers who consistently underpay their provisional tax estimates — particularly if the underpayment exceeds 20% of the final liability — face both penalties and increased audit risk.
10. Inconsistent Year-on-Year Declarations
A sudden large increase or decrease in income, deductions, or assets compared to prior years will be flagged. SARS tracks your filing history and looks for unexplained changes.
11. Business Expenses Claimed Against Employment Income
Employees cannot generally claim business expenses against their employment income unless they earn commission income or are specifically contractually obligated to incur expenses. Claiming general business expenses as an employee is a common error that triggers queries.
12. Crypto Asset Transactions Not Declared
SARS has made clear that crypto assets are subject to either income tax or capital gains tax. Exchanges operating in South Africa are required to submit third-party data. Undeclared crypto gains are an increasing audit focus.
What Happens During a SARS Audit?
A SARS audit typically begins with a request for supporting documents via eFiling. You will be asked to upload:
- IRP5 certificates
- Medical scheme tax certificate
- Logbook (if travel deductions claimed)
- Bank statements
- Rental agreements and expense invoices
- RA fund certificates
You have 21 business days to respond. Failure to respond results in SARS raising an estimated assessment — almost always unfavourable to the taxpayer.
How to Protect Yourself
The best protection against an audit is a correctly prepared return with all supporting documents retained for five years. At Fulcrum | BI Prime, we prepare returns with audit defence in mind — every deduction is supported by documentation before the return is submitted.
Sources: SARS Verification Guide | SARS Audit Guide
