South Africa home study claim for tax purposes

Taxpayers can claim a tax deduction if they have worked from home for more than half of their total working hours or for more than six months during the tax year that started in March 2020. Taxpayers must meet the minimum requirements to claim this expense on the income tax return:

• You have spent more than half of your total working hours working from your home office.
• You have a letter from your employer that states that you can work from home and confirms the percentage of time you spent there.
• You have an area of your home exclusively used and set up for work. Your study cannot just be a desk in a room used for other purposes, it must be exclusively used as a study.

Once the taxpayer meets these requirements, they can claim rent or interest on your bond, repairs to the premises, rates and taxes, water and electricity, cleaning, data usage, wear and tear of office equipment and all other expenses relating to your house only. The data usage and wear and tear are not based on the percentage of area but if the use of data or office equipment is more than 50% used for business then the full cost can be claimed and is not apportioned.

To determine your home office deduction, workers should calculate the total square meterage of their home office in relation to the total square meterage of your home and convert this to a percentage.

This percentage is then applied to the home office expenditure to calculate the portion that is deductible. These claims will not be listed on their SARS auto assessment and therefore it is important to ensure that the auto assessment is not accepted and that they add these to their tax return themselves.

Do not accept the auto assessment that are sent out by SARS. One of the questions on the wizard when preparing the income tax return is the following:

Did you receive any other income (excluding amounts received/accrued as a beneficiary of a trust(s), or deemed to have accrued in terms of s7) and/or incur any other allowable expenses not addressed above? This must be marked as Yes. This will bring up an additional page where the expense can be claimed.

Below is an example of expenditure you can claim.

Do you own or rent your property?
Rent Yes/No Own Yes/No

Rental expenditure for renters
Rental
Water and Electricity
Cleaning
Repairs and Maintenance
Security
= Total household expenditure

Square meterage of study
Square meterage of total property
% of expenditure claimable for study
Claim in full cost of Internet and Wear and Tear of Office Equipment.

Please note that any equipment bought during the year for less than R7 000 can be claimed in full in year of purchase.
Insurance on household goods can be claimed in the percentage of cost of office equipment over total household goods insured.

Property owned
Bond Interest (not bond repayment which includes capital portion repayment)
Water and electricity
Cleaning
Repairs and Maintenance
Levy
Insurance on Building
= Total household expenditure

Square meterage of study
Square meterage of total property
% of expenditure claimable for study
Claim in full cost of Internet and Wear and Tear of Office Equipment.
Please note that any equipment bought during the year for less than R7 000 can be claimed in full in year of purchase.

Wear and Tear Schedule Rates
Office equipment – electronic                                     33.3%
Computer software (must relate to business use)      50.00%
Furniture and Fittings                                                  16.67%

Please remember that wear and tear is calculated on the original cost of the asset in proportion to the months in which it is used during the tax year.

Example: Computer purchased in August 2019

Cost                                                                           R 20 000
Wear and Tear August 2019 to 28 February 2020
For 7 months                                                             R 3 885 (during this tax year not claimable as worker did not work at home)
Net Book value on the 28 February 2020                 R 16 115
Wear and Tear 12 months                                         R 6 660 (based on 33.3% of original cost)
Net Book value 28 February 2021                             R 9 455
Wear and Tear 12 months                                         R 6 660
Net Book Value 28 February 2022                            R 2 795
Wear and Tear 12 months limited to book value       R 2 795
Net book value 28 February 2023                             R Nil

Bear in mind that if the computer is sold that some of the wear and tear claimed is then recoupable by SARS.

For more information, please contact:

Ruth Lockwood
Commercial Director Africa
T: +27 79 479 3842
E: Ruth.Lockwood@SantaFeRelo.com

Marty Santana
Tax Consultant
M: +27 82 342 3153
E: Marty.Santana@SantaFeRelo.com