It happens each year, we all do our tax returns on the SA Revenue Service (Sars) efiling platform, and hope that this financial year will be fruitful.
Like many South Africans, I was surprised to see that Sars had done my income tax return for me, via their auto assessment feature. I was again hopeful but to my dismay, I was told I was only eligible to receive 70 cents back.
I suppose not having to pay Sars is a conciliation prize and I made peace with the decision.
That was until and very good friend of mine told me she had claimed from Sars for working from home. She gave me her tax practitioner’s number and so began my journey.
It is so important I think to not just rely on the auto assessment and as boring as it may seem or daunting, you must familiarise yourself with Sars and their various tax incentives.
Now, I was apprehensive and despite working for a business newspaper, my tax skills are limited. This is why the practitioner was vital in helping me understand what I could claim for and how I can go about doing that
In the end, I was able to claim back more than R9 000 for this financial year, not bad from 70 cents.
BUT WHAT ABOUT YOU
I know you thinking, how can I do this?
Step 1: Get on the Sars site and learn what incentives you can utilise.
Sars has a site called “Home Office Expenses” and believe me this was so informative.
In July, 2021 Sars hosted a webinar on “Home Office Tax Requirements”. Like you, I missed it but you can watch the webinar on their site.
Some of the main questions include:
- When will I be able to claim home office expenses?
Sars sates that, “If you are an employee who works from home and have set aside a room to be occupied for the purpose of ‘trade’, you may be allowed to deduct certain expenses incurred in maintaining a home office, which will be calculated on a pro-rata basis. All this is provided that you meet the requirements as set out in the Income Tax Act”
- What are the requirements for claiming home office expenses?
According to Sars, the Income Tax Act states that a tax deduction for home office expenses will only be considered:
- If the room is regularly and exclusively used for the purposes of your trade eg employment; and is specifically equipped for that purpose. The home office must therefore be set up solely for the purposes of your trade; and
- If your remuneration consists only of a salary and similar remuneration, your duties must be mainly performed in this part of the home. It therefore means you must perform more than 50% of your duties in your home office; or
- If more than 50% of your remuneration consists of commission or variable payments based on your work performance, more than 50% of those duties must be performed otherwise than in an office provided by your employer.
- What constitutes home office expenditure?
- Rent of the premises.
- Cost of repairs to the premises.
- Expenses in connection with the premises, which could include: rates and taxes. cleaning costs; and electricity.
According to Sars, there are other typical expenditures that may qualify for a separate deduction in respect of maintaining a home office, that may include:
- General wear and tear on items used for trade purposes in the office.
- Office equipment, furniture and fittings, and repairs to phones, internet and stationery.
I have to say that in my case Sars rejected my electricity and internet claims for some reason. So it clearly is on a case-by-case basis and we are all not the same. One of the most difficult issues for me was calculating my home office expenses for Sars, and using their method. Let’s just say maths is not my strong point.
In this case, I used the tax practitioner and she did all of that for me. But if you are not as lazy as I am, here is the method of calculating home office expenses according to Sars.
“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,” according to the Sars site.
- A = the area in m² of the part specifically equipped and used regularly and exclusively for trade (namely, the qualifying home office).
- B = the total area in m² of the residence (including any outbuildings and the area used for trade in the residence).
- Total costs = the costs incurred that are linked closely to the premises (such as rent, rates and taxes, repairs, and electricity), excluding expenses of a capital nature.
BUSINESS REPORT