Flexible work arrangements have become increasingly popular as the needs of employers and employees change in response to the coronavirus (COVID-19) pandemic.
There is also financial pressure on employers to reduce overhead costs, such as office space—which is especially relevant since many employees are required to work from home in order to reduce the spread of COVID-19, and many employers have chosen to not return to their offices as advised by the government, wherever possible. This has created an opportunity for many employees who did not previously claim home office expenses as tax deductions, to do so for the 2021 tax year (1 March 2020 - 28 February 2021), in particular (and possibly going forward) if working arrangements move away from offices and more towards remote working.
The South African Revenue Service (SARS) allows certain individual taxpayers to deduct their home office expenses from their taxable income, provided that the requirements of the Income Tax Act No. 58 of 1962 are met.
Interpretation Note 28, Issue 2 (as issued by SARS in March 2011) provides additional guidance on the deductibility of home office expenses. The general rule is that the deductibility of expenses relating to a home office is determined with reference to section 11, paragraphs (a), (d) and (e), read together with sections 23(b) and 23(m). This means that for a home office expense to be deductible, the requirements of sections 11, 23(b) and 23(m) must all be met.
Read an August 2020 report [PDF 1 MB] prepared by the KPMG member firm in South Africa
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