After you have submitted the Company tax return (ITR14), SARS may request you to complete an IT14SD.

The purpose of the IT14SD is to reconcile the information on the ITR14 to the VAT and PAYE submissions made during the year. The VAT information is made bi-monthly on the VAT 201 and the PAYE submission is made every month on the EMP201.

Below are some reasons why there may be reconciling differences between the ITR14 and the PAYE and VAT submissions. Remember, you only need to give an explanation where there is a difference greater than R100. If applicable, you must split up your difference into smaller amounts and give an appropriate reason for each difference. You can add a line by clicking the + sign on the right hand side next to the amount field.

PAYE reasons:

• Tax free benefits included in employment cost in ITR14 but these would not be included for the purpose of calculating the PAYE deduction.
• Any amounts paid for by employer for employee recorded in ITR14 but not included for PAYE calculation.
• Fringe benefits included for PAYE calculation but not recorded in ITR14.

 Output VAT reasons:

• Output VAT not charged on some sales in error.
• Vatable amounts recorded on VAT 201 but not recorded in ITR14 turnover.
• VAT registration partial way through tax year, therefore output VAT would not be charged on all sales.
• 2 month VAT periods do not coincide with financial year end eg. assume a February year end and VAT return is submitted for February and March. The total VAT supplies per VAT 201s would differ from total sales per ITR14 as a result of the month of March.

 Input VAT reasons:

• VAT registration partial way through tax year, therefore input VAT would not be claimed on all expenses.
• 2 month tax periods do not coincide with financial year end eg. assume a February year end and VAT return is submitted for February and March. The total expenses on which VAT input was claimed would differ from expenses per ITR14 as a result of the month of March.
• The IT14SD only has a field for Cost of Sales per ITR14 and does not include other expenses on which VAT would be claimed. Therefore other expenses (beside Cost of Sales) on which VAT was claimed would be a reconciling item.
• There may be purchases from non-VAT vendors which would be included in Cost of Sales in ITR14 but would not be included in VAT 201 purchases.