Business/23 November 2021, 07:27am/ TI Reporter
SARS logo:image sars website
Bloemfontein: The South African Revenue Services (SARS) says that workers are allowed to claim for home office expenses – but only under very specific circumstances.
The tax collector said that these deductions are outlined in the Income Tax Act as follows:
In an updated guidance note published on Wednesday (17 November), SARS provided a further breakdown of who qualifies and under what circumstances.
The full guidance note and some of the key issues are detailed below. More information about tax and working from home can be found on SARS’ website here.
What documents do I need?
SARS said that the following should be included:
If I have to pay for a dedicated Wi-Fi/internet link for my home office, would this be claimable?
Wi-Fi equipment that is owned by a taxpayer may qualify for a wear-and-tear allowance.
Other Wi-Fi expenditures, for example, monthly subscriptions and certain installation charges, are not permitted as a deduction for home office purposes, SARS said.
If you only use a portion of your bedroom for your home office, are you eligible to claim for a home office?
“The home office must be exclusively used for purposes of the trade,” SARS said.
“A taxpayer will find it very difficult to prove that a portion of his or her bedroom is used exclusively for purposes of trade, and thus would not qualify for a home office deduction.”
What exactly does the employer need in the letter to SARS that confirms the employee’s work from home arrangement?
I have a full-time domestic helper who cleans my home office space daily and I pay her cash at the end of the month. What proof would you require in this instance?
Proof of payment must be retained, SARS said. “The domestic worker should sign an acknowledgement of receipt of the monthly payment.
“As an employer, you would be required to register for UIF for the domestic worker, proof of payment of UIF contributions may also be requested on audit or verification by SARS.”
Is it possible for me to claim for home office if I have already submitted my returns for 2021?
This is possible in certain circumstances, SARS said. Return submissions often allow for a “request for correction” upon realising that you have omitted certain information or made an error.
Alternatively, you could lodge an objection, provided it is lodged within the prescribed time limits, it said.
How are home office expenses calculated?
Home office expenses are calculated on a pro-rated basis – the square meters of the area of home office versus the total square meters of your home.
Should you qualify for a deduction in respect of home office expenses, the amount must be calculated on the following basis: A / B x total costs, where:
“Note that only expenses relating to the premises must be apportioned based on floor area, such as for example rent, interest on bond, rates and taxes, cleaning, etc.
“Expenses that do not relate to the premises (such as wear and tear on equipment and furniture) do not need to be apportioned based on floor area,” SARS said.