Claiming home office expenses against income is a “hot topic” for many employees who have been working from home during lockdown. There’s much talk about how much everyone is going to be claiming back but it’s not that simple, audits will be common place and tax refunds may not be as considerable as everyone had hoped.
Claiming of home office expenses will bring with it plenty of admin. Employees can only claim for certain allowable expenses, SARS requires proof thereof and the list of claimable expenses is not quite what you thought it to be.
Employers will be required to know the ins and outs and will have to differentiate between what is claimable and what is for the employer’s account.
While employees will look to their accountants to maximize tax refunds, accountants will request various records to prove costs incurred and employers will be burdened with a plethora of admin and queries with payroll departments potentially getting into conflict situations.
Some home office expense claim questions to ask yourself:
- Can phone and data bills be claimed from SARS or is it reimbursable by employers?
- When claiming, do your employees have a dedicated office for working from home, and if not is the “dining room table” deemed a suitable office by SARS, and what if the office space was shared with a spouse?
- What percentage of the year did your employees work from home and do they qualify for a claim?
- Have you handled Home Office Expenses in compliance with legislation?
- Are you aware of the potential cashflow danger that awaits businesses with upcoming claim lump sums?
- What if an employee has left your employment during 2020 and his home office expenses were handled incorrectly, and the queries start to mount up?
Don’t miss out on our Payroll Managers Tax Year End Virtual Seminar where we unpack the 2021 Budget in detail and prepare Business Owners and Payroll Managers for the intricacies surrounding home office expenses.