12 September 2025
With the tax season still open, if you have filed your taxes, you may be breathing a sigh of relief. However, once your return is filed or before it is filed, it’s key to be prepared in case you receive an audit notice from the South African Revenue Service (SARS).
While being audited is not necessarily a sign of wrongdoing, it’s a stressful and time-consuming process that is best avoided. If you do run into an audit request for any reason, you are advised to consult with a tax professional who can help you respond appropriately to SARS.
Claiming excessive deductions
SARS fully expects freelancers to take advantage of deductions to lower their taxable income, but claiming excessive deductions or ones that don’t add up can be a red flag. It’s best to stick to deductions that are directly related to your work, such as office supplies, business-related travel and legitimate client meals. Be reasonable and ensure that all deductions are documented and supported by receipts and other relevant documentation to mitigate as many audit risks as possible.
If you work from home, the home office deduction can be especially beneficial, but it must meet SARS’s strict requirements. Your home office must be exclusively used for business purposes and not double as a personal space (e.g., your dining room). Keep detailed records, including photos, to demonstrate the legitimacy of your claim.
Underreporting income
One of the most common mistakes freelancers make is underreporting their income, whether intentionally or accidentally. If the income you report doesn’t match the information the revenue services have, it could trigger an audit. To avoid this, ensure you carefully track all income throughout the year. Keep digital or physical copies of all your income, expenses and deductions for your records when you file for taxes.
Mixing personal and business expenses
As a freelancer, it’s crucial to separate your personal expenses from your business ones. Using your business account for personal spending—or vice versa—is an easy way to create confusion and draw unnecessary attention. To maintain clarity, establish separate bank accounts and credit cards for your business. This makes it easier to identify legitimate business expenses and ensures that you aren’t inadvertently claiming personal costs. Accurate bookkeeping is your best defence here—maintain organized records and categorize expenses correctly.
Overusing vehicle deductions
Many freelancers claim deductions for vehicles they use for business purposes. While this is perfectly fine, claiming 100% of your vehicle use as business-related—even if it’s also your family car—can raise suspicion. If you’re using a car for both personal and business reasons, keep detailed mileage logs. Document the date, purpose of the trip and miles driven. SARS accepts well-maintained mileage records as evidence for deductions.
High income
It’s no secret that high earners are more likely to be audited, regardless of whether they are freelancers or salaried employees. If your freelancing income is substantial, you may be subject to heightened scrutiny.
While you can’t control your income level, you can minimize audit risks by ensuring your tax return is flawless. Document your income thoroughly, keep accurate records of expenses, and file your documents correctly. Consider working with a tax professional to double-check your return if you are in a higher income bracket.
As a freelancer, avoiding audit red flags primarily involves maintaining accurate reporting, keeping detailed records, and making reasonable claims. Take time throughout the year to maintain organized financial records so tax season doesn’t become a scramble. If possible, consult a tax professional who understands the unique challenges freelancers face to help you develop a proactive approach to tax filing that can save you from unnecessary stress and help you focus on what truly matters—your work.