YOUR MONEY: Working from home — what can I claim back in tax?

Question:

Loads of people now work from home, but the South African Revenue Service (Sars) is refusing to allow them to deduct interest on their mortgage from their tax returns as part of their home office allowance — how is that possibly fair? This comes after rates have gone up. 

— Joanne Baynham

Answer:

Sars took a tough stance against claiming for working from home in 2021, so much so that 71% of claims submitted were disallowed. Furthermore, in an interpretation note issued on March 4 2022, it said interest is not deductible.

The general approach of Sars is that people working from home are very limited in what they can claim, even more so if they own the property. Every tax return with a home office claim goes for audit, which also prolongs the time for refunds to be paid.

Remember: Sars is a tax collector, and tax collectors are seldom “fair”.

There are, however a few work-from-home hacks you could adopt:

1. Work out the exact size of your home office and home, and make sure it’s properly equipped as an “office”.
2. Get a letter from your employer or update your employment contract to include a requirement that you work from home more than 50% of the time.
3. Keep proper records of your home office expenses, except for bond interest. The allowable deductions for employees working from home (noncommission earners) are: rates and taxes, electricity, security, rent and home office repairs. Other costs such as telephone and internet are not deductible.
4. If you’re a commission earner, and commissions make up more than 50% of your total income, you can claim a lot more expenses than a standard employee. 

In a nutshell: Sars makes it very hard to claim anything whatsoever for  working from home. Strongly consider whether the potential tax reward is worth the stress, time and effort that’s needed.

— André Bothma, www.taxmaverick.co.za 

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