Many employees have been working from home for the past year – and longer – due to the Covid-19 restrictions and lockdowns. You may be thinking about claiming back home office expenses when you submit your taxes this year to SARS. Scorpion Legal Protection highlights the qualifying criteria.
To claim for home office expenses, you must comply with section 23(b) of the Income Tax Act. This means that:
- The room you have set up as a home office must be regularly and exclusively used for the work you do for your employer. Just having a home office space does not automatically qualify you, you must be using this space to do your job. The home office must be set up solely for the purpose of working, and it cannot be used for anything else.
- If you earn only a salary, more than 50% of your duties must be carried out in your home office.
- If you earn more than 50% of your pay through commission or other payments based on your work performance, more than 50% of these duties must be performed in your home office.
- If your pay mainly comes from a salary (and not from commission, etc), you will need a letter from your employer stating that the employer requires you to work from home. You do not need this letter if you earn more than 50% of your income as commission.
It’s important to note that claiming is not just as simple as filling in what you think SARS owes you. They are very strict about home office expenses, and you must be able to prove everything you are claiming for. If you lie and get caught out, you could face harsh fines.
SARS can decide to audit anyone at any time. If this happens, you will need to be able to prove what you’re claiming for. This means you need to have physical/electronic evidence in the form of receipts, contracts, bills, etc. Basically, if you cannot prove the expense, do not claim for it. You may need to submit supporting documentation for every expense so make sure you keep a detailed file. SARS may also decide to visit the property, so make sure that you are 100% compliant.
Scorpion’s tax help desk is available to our Platinum & Policy A members*. Our registered tax practitioners can ensure that your taxes are done right, and that there are no nasty surprises from the tax man later along the line. And even if there are, as long as your policy with us is active, we will be there to help. Let Scorpion do your taxes for you. Click here to find out more.
*Tax advice and assistance applicable to Policy A and Platinum. Tax submissions on efiling to SARS applicable to Platinum only.
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* This is only basic tax advice and cannot be relied on solely. The information is correct at the time of being sent to publishing. This is not financial advice.