Dear reader,

Hot off the press: SARS has issued a new interpretation note, clarifying how you can deduct home office expenses.

If:

•    Your income is derived from employment or the holding of an office, and more than 50% of the total income of your employment or holding office is commission or other variable payments which are based on your work performance;  and your duties aren’t performed mainly in an office provided by your employer

Or.

•    Alternatively your duties are performed mainly (more than 50%) at  home, then the good news is, you qualify to claim home office expenses.

If you’re one of the fortunate few who DO qualify , the following expenses can be claimed on a proportionate basis, whichever is applicable to your situation:-

•    Rent of the premises;
•    Interest on your bond;
•    Cost of repairs to your premises;
•    Insurance;
•    Rates and Taxes; and
•    Any other expenses connected to the premises.

In addition you can claim 100% of direct expenditure which could include:

•    telephones,
•    cleaning (e.g. hiring a cleaning lady)
•    office equipment and furniture purchases less than R6 000; and,
•    wear and tear on the higher value offices equipment and furniture.

Follow the trend: Send your staff home to do their work!

Given the advancements in technology and the high cost of office infrastructure including office rent, it’s not surprising that employers are allowing their staff to work from home.

I think it makes perfect sense: it could lead to higher productivity, seeing as staff save time and money by NOT being forced to travel to work and spend on toll fees or petrol. SARS obviously shares my opinion. It has made it clear that there will be additional benefits from a tax perspective. For the employee, it’s a saving on fuel – which is quite a saving, given that the fuel and RAF levies went up this past week- vehicle maintenance, toll fees, income tax, the frustration of being caught up in traffic at the most important times. For the employer it could reduce the salary bill, subject to negotiations. It also reduces the costs involved in office space rentals and maintenance, as well as a reduction in infrastructure cost – all leading to higher productivity.

One of my friends who emigrated to the USA a number of years ago is currently  employed in the IT industry. When I visited him recently, he was working from home for a major IT company and is managing a team which are employed throughout the USA and also working from home. That has all been made possible by technology!

This made me realise that SA employers need to start thinking out of the box and should consider the savings that are achieved when employees are allowed to work from home.

Marius Maritz
Editor-In-Chief, Practical Tax Loose Leaf