Q&A: Can I claim work-from-home expenses under lockdown?
The rules for who and what qualifies are specific, and getting a tax deduction might not be as simple as you think
Q: As many of us are now working from home, can we claim any of the costs — Wi-Fi, data, internet service provider, cellphone, home computer, electricity, printer costs and even a share of rates and the bond — as tax deductions? — D Read, via WhatsApp
A: Deborah Tickle, tax professor at the University of Cape Town and author of TickleonTax.net, replies:
Unfortunately, the rules for claiming “home office” expenses as a tax deduction are restrictive.
The Income Tax Act provides for a home office deduction if your income is derived from being a sole trader or if you are an employee earning commission or other variable payment that is based on your work performance and your duties are mainly (more than 50%) performed outside your employer’s office. If your salary is fixed, you can claim if your duties are mainly (more than 50%) performed in your home office.
This means if you usually work from your employer’s offices you would not be able to claim any costs related to working from home against your salary.
You could argue that during the lockdown you have been required to work “mainly” (being 100%) from home and therefore qualify. Hopefully, the SA Revenue Service will soon give clarity on its view on this.
However, even if you satisfy the “mainly at your home office” requirement, you can only claim domestic or private expenses, which include the interest portion of a home bond repayment or rent on your home, the cost of repairs thereon or any other expenses in connection with any portion of your home that is occupied for trade purposes.
To be considered to be occupied for trade purposes, the part of your home that is used as an office must be specifically equipped for trade (work) purposes, and regularly and exclusively used for those purposes.
This means if you are working from your dining-room table or desk in your bedroom or family room, you will not be able to claim the costs of using that room.
If you do have a dedicated area of your home that is used exclusively as your office, you can claim a portion of your home bond interest or rent, insurance, rates, electricity and water, and cleaning and maintenance that relate directly to the relevant area of your home that is used as the office.
You may also claim depreciation (“wear and tear”) on your office assets — for example, your computer (if it is your own and you paid for it), the desk, desk light, bookcase and chair(s) and so on. The cost or value of these assets may be claimed over their useful lives — for example, you could claim furniture and fittings over six years.
You may also deduct consumables such as stationery, data and printer ink cartridges, but only to the extent you used it for trade purposes.
If you have a separate business/work phone, you may claim all the costs, but if the same phone is used for domestic as well as for business purposes, you may only claim that portion you can substantiate as relating to your business use.
Remember, however, if you claim a tax deduction for a home office, you may not be able to use the full R2m primary residence exclusion to offset any capital gains.
If you don’t have a dedicated home office and your employer is reimbursing you for data, stationery, phone costs, and so on you may claim such costs directly against this reimbursement.
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