Paying a SARS debt your business can’t cover this month.

SARS can let a business pay a tax debt in instalments, or defer it, under sections 167 and 168 of the Tax Administration Act. It considers an arrangement when the business has a temporary cash shortfall, money on the way that will cover the debt, or when collecting in full now would cause real hardship.

You apply from the Payment Arrangement button on your statement of account or final demand on eFiling, or by calling SARS on 0800 00 7277. SARS will only look at the request once every return and payroll reconciliation is filed. For a debt of up to R100,000 paid over up to 11 months, or up to R5 million paid over up to 6 months, it does not ask for supporting documents.

An arrangement spreads the payment out. It does not stop interest: interest runs until the tax is paid.

Unpaid PAYE, VAT and UIF each attract a penalty of 10% of the amount not paid on time. Interest is charged on top at SARS’s prescribed rate, which is 10.50% a year from 1 September 2026.

If the debt stays unpaid, SARS can instruct anyone who holds the business’s money, including its bank, to pay the debt over from it (section 179). It normally has to deliver a final demand at least 10 business days before doing so, which is the window to act in, though it can skip that step if it believes the debt is at risk. In some circumstances the people who manage the business’s finances can also be held personally liable for its tax debt (section 180).

Alternative business lenders price short-term funding by the month, so a loan is usually dearer than SARS’s own interest. It earns its cost in a few cases: when SARS has turned down an arrangement, when a final demand means the bank account is at risk, or when the business needs a clean tax position quickly, for a tender or a lender that asks for one.

If you do borrow, borrow the whole debt including penalties and interest, and make sure the repayment fits the months after the bill, not only the month of it. A loan that clears SARS but leaves the next VAT period short has moved the problem, not solved it.

SARS can accept part payment in full settlement of a tax debt (sections 200 to 205), but only when that gets it the best net return on the debt. The request needs a statement of assets and liabilities at market value, the last twelve months of income and spending, and expected income for the next three years (section 201), and SARS’s independent debt committee considers it. It is for a business that cannot pay, not one that is short this month.