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PRINT HEAD: YOUR MONEY: Tax and home office expenses
Question:
During the pandemic our company instructed staff to work from home, which we’re still doing. I am working a full week but never going into the office. As I submit my tax return, can I claim back some expenses for this?
— Fat Wallet Facebook community user
Answer:
Yes, you can, but there are lots of terms and conditions to make it really work.
First, you need to have a dedicated space for your home office. Not a kitchen countertop or a desk stuck in the corner of your lounge. The SA Revenue Service (Sars) wants a real workspace. So, ideally, it should be a spare room which you have kitted out for your home office. This space also needs to be used exclusively for your work and needs to be used regularly, not just for sending the occasional e-mail, and it certainly cannot be a spare bedroom occasionally used by guests.
Second, Sars requires a letter from your company confirming that you’ve been working from home for at least 50% of the time.
If you meet these two requirements you can submit a claim for home office expenses.
While there is no exhaustive list of what you can claim as home office expenses, it would typically include rent or interest on a mortgage bond, municipal rates and taxes, electricity, cleaning and security, according to AJM Tax consultancy. The equation is simple: if your office is 15% of the space in our home you can claim 15% of these expenses when you submit your tax return.
But two warnings from AJM Tax. First, keep all your documents and receipts, as well as photos of the space.
Second, according to the consultancy: “If you sell your primary residence and you have previously claimed a deduction for home office expenses, it will influence the primary residence exclusion available to taxpayers.” So there are longer-term implications you need to consider too.
Our advice is that, with many home office expense claims being rejected, it is well worth getting some help from an accountant to make sure you do it right the first time.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
READER LETTER OF THE WEEK
YOUR MONEY: Tax and home office expenses
How to claim back your work from home expenses
PRINT HEAD: YOUR MONEY: Tax and home office expenses
Question:
During the pandemic our company instructed staff to work from home, which we’re still doing. I am working a full week but never going into the office. As I submit my tax return, can I claim back some expenses for this?
— Fat Wallet Facebook community user
Answer:
Yes, you can, but there are lots of terms and conditions to make it really work.
First, you need to have a dedicated space for your home office. Not a kitchen countertop or a desk stuck in the corner of your lounge. The SA Revenue Service (Sars) wants a real workspace. So, ideally, it should be a spare room which you have kitted out for your home office. This space also needs to be used exclusively for your work and needs to be used regularly, not just for sending the occasional e-mail, and it certainly cannot be a spare bedroom occasionally used by guests.
Second, Sars requires a letter from your company confirming that you’ve been working from home for at least 50% of the time.
If you meet these two requirements you can submit a claim for home office expenses.
While there is no exhaustive list of what you can claim as home office expenses, it would typically include rent or interest on a mortgage bond, municipal rates and taxes, electricity, cleaning and security, according to AJM Tax consultancy. The equation is simple: if your office is 15% of the space in our home you can claim 15% of these expenses when you submit your tax return.
But two warnings from AJM Tax. First, keep all your documents and receipts, as well as photos of the space.
Second, according to the consultancy: “If you sell your primary residence and you have previously claimed a deduction for home office expenses, it will influence the primary residence exclusion available to taxpayers.” So there are longer-term implications you need to consider too.
Our advice is that, with many home office expense claims being rejected, it is well worth getting some help from an accountant to make sure you do it right the first time.
— Simon Brown
Send us your questions to yourmoney@fm.co.za
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.