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Tax Talk

Tax Talk

Author: Natalie Wocke
Date: 2014-09-05
Home Office Expenses
Interpretation note 28 provides guidance on the deductibility of home office expenses by persons in employment or persons holding office. In order that home office expenses are deductible, ALL the requirements of s11, 23(b) and 23(m) of the Income Tax Act 58 of 1962, must be met.

A deduction is generally only claimable by persons holding office, or commission earners, where the duties are performed >50% in the home premises occupied for the purpose of trade, or where the income from employment or office, comprises > 50% commission or other variable payments based on the work performance, where the duties are mainly performed from the home office.

A further requirement is that the part of the home for which the taxpayer seeks to claim a deduction, must be used regularly and exclusively for trade. A room used for dual private and trade purposes will not qualify for any deduction. The room must be equipped specifically for the carrying out of that trade.

The extent of the expenditure that may be claimed is generally calculated as the percentage of the floor area (m2) used as set out above, in relation to total area.

The types of expenditure that may be claimed are a portion of your utilities, a portion of your rent, or bond interest, and the portion of cleaning and repairs and maintenance relating to that area.

To determine whether you qualify and most importantly that your claim is compliant, make an appointment at Roberts and Chaplin. Branches in Ballito (032) 586 0387 and Umhlali (032) 947 1010.