Who Gets Chosen for a Lifestyle Audit?

Feb 11, 2021

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Lifestyle audits aren’t just performed at random. In a company, an employee might be singled out for an audit if they all of a sudden start living a lavish, unexplained lifestyle. Without getting a raise, the employee suddenly purchases a new car or home, wears more expensive clothing or jets off on lavish holidays.

Lifestyle audits have been a part of the South African lexicon for the past eight years. Recently, the government has threatened a wide-spread implementation of lifestyle audits for public-sector workers in an attempt to crack down on fraud and corruption.

In tax fraud cases, a tax return is first selected by a computer program for audit based on factors including large changes in income, a very large or small amount of income and the type of occupation. Self-employed people, small business owners and those who work in industries where fraud is more prevalent (e.g. retail) may be chosen more than others.

Sars does not reveal exactly how it identifies candidates for lifestyle audits, but they do encourage citizens of South Africa to report anyone that is living beyond their financial means, displaying unusually high life-style patterns for a person with similar forms of known income.

Should you require assistant with a Lifestyle Audit get in touch with Uphando today!


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