Been working from home? Here’s how you can claim back from SARS

Published on 28th July, 2021 at 05:41 pm

The COVID-19 pandemic lockdown has led many South Africans to work from home. If that’s you, then you’re in luck. If you’ve been working from home during the pandemic, you can get money back from SARS. There are some exceptions, however. Here’s what you can and cannot claim for as a legitimate tax deduction for the 2021 tax year, and how to go about it.

How do I know if I qualify for this tax deduction?

If you have worked from home for more than half of your total working hours or for more than six months during the tax year that started in March 2020, you can claim a tax deduction, explains Nicci Courtney-Clarke, head of tax at TaxTim. Further to this, you must meet the following requirements:

• Your employer must allow you to work from home.
• Your home office must be specifically equipped for your trade, meaning it must be specially fitted with the relevant instruments, tools and equipment required for you to perform your work.
• You must have an area of your home which is used exclusively for this purpose. “Taxpayers who meet clients at their home in their dining room would not qualify, for example. Or working in a room in the morning, which doubles up as a kids’ playroom in the afternoon, would also not qualify,” clarifies Courtney-Clarke. A separate space, which is used specifically for the taxpayer’s work, needs to be maintained to qualify for the deduction.”

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What exactly can I claim for if I’ve worked from home?

“Salaried employees can claim expenses that relate to the property only,” says Courtney-Clarke. “These expenses include rent, interest on a bond, water and electricity, rates and taxes, cleaning, levies, repairs and maintenance to the home office, security, internet and wear and tear on office equipment.” If you’re a commission earner (those who earn commission that makes up more than 50% of their remuneration), a separate set of rules apply. “Commission earners on the other hand can claim all of the above as well as commission-related business expenses, which include telephone, stationery, repairs to your printer etc.”

Filing taxes for the 2021 tax year will be a different experience for some to previous years. Read this guide for more information on how to file your taxes with confidence.

How do I calculate the deduction?

If you meet the criteria, then you’ll need to make an apportionment of these costs. How to do this? “The expenses relating to the property must be apportioned based on the floor area, like the square meterage of your home office as a percentage of the square meterage of your whole property,” says Courtney-Clarke. The expenses to be apportioned would be rent, interest on a bond, water and electricity, rates and taxes, cleaning, levies, security and internet. The expenses that relate specifically to the home office, like office repairs, maintenance and wear and tear on office equipment, do not need to be apportioned.” You need to ensure these are properly calculated, says Courtney-Clarke, as you’ll need to submit your apportionment calculation to SARS if they request supporting documents from you.

What documents do I need to provide?

“Your employer will need to issue you with a letter that states that you are allowed to work at home, and the percentage of time spent there,” says Courtney-Clarke. Not sure what this should entail? Use this letter template from TaxTim to guide you. Having these documents on hand is really important, explains Courtney-Clarke. “If you claim home office costs, it is highly likely that SARS will select your return for audit verification, which means you will need to submit supporting documents to substantiate your home office claim. These would include municipal bills, your lease agreement, bank home loan statements that show the interest paid for the tax year, maintenance or repair invoices, and all other relevant invoices, receipts and calculations.”

Waiting for a refund from SARS? Read this for what you need to know before you log a query.

Is this something the SARS auto-assessment can do for me?

“The SARS auto-assessment won’t include your home office claim,” warns Courtney-Clarke. “This would be a reason not to accept it. You will need to work it out yourself and enter it in the ‘Other Deductions’ section of your tax return. You can refer to TaxTim’s calculator, which can help you with your calculations,” says Courtney-Clarke.

TaxTim is an online eFiling tool that takes the work out of tax returns for you. Reality Health, Plus, Core and Club members get free access to the tool, valued at up to R629. If you have any more questions about your tax return for 2021, a qualified financial planner can help answer them. Book a meeting now.