WeeklySA_AdminSPEND:More money spent on data bundles
By Thuli Zungu
WORKING from home since the pronouncement of the lockdown restrictions by government, has become a nightmare and has brought misery to most employees who were now spending more money to perform their duties.
While many employees thought working from home could help them save on their transport costs, they had now established that the move had increased their budgets and inconvinienced their lifestyles with no assistance from their employers.
A number of employees interviewed by Consumer Eye said they spent more money on food, data bundles and electricity since they had been working from home than ever before. Some said they had converted a room into a work office to ensure they delivered their work on time without the employer contributing any office equipment except a laptop.
Ntombhenhle Mazibuko, 56, of Florida Lake in Roodepoort, said at first, she thought she would save more on petrol, but that money now was spent on food, electricity and telephone calls as her employer did not contribute to her bill after her cell phone allowance of R450 had been exhausted.
“I end up using my own money to perform my work as my employer is not willing to top it up even after my salary was reduced,” she said. After her salary was reduced, her life had been like a living hell. Sydney Mahlangu, 50, of Mofolo South, Soweto, whose wife was retrenched when her employer downsized operations due to the negative impact of Covid-19 pandemic, said he had never spent so much money on food and electricity.
The father of three said he was also forced to convert one of his rooms into an office and had bought extra furniture. “If I could, I would claim these expenses from SARS.”
Andre Kruger, a director at Flaxman Attorneys, said since the Covid-19 pandemic there has been a significant increase in expenditure incurred by employees as they were forced to work from home to prevent the spread of the virus in the workplace.
He said employees were able to claim tax deductions for home office expenditure provided that they met the requirements of Section 11(a) of the Income tax Act.
According to the Act, home office expenditure included expenses such as phone costs, data, office equipment and stationery, cleaning fees, rent of premises, interest on bonds, cost of repairs to a premises; desk; chair; computer; software programmes; software licences; internet connection; printer/scanner/copier,and other expenses in connection with the wear and tear of the premises.
This means that employees who shared a work area with family members or employees working from their dining room, would not qualify for the tax deduction. In terms of the Act, an employee can claim a tax deduction for expenses incurred in working from home if the employee worked from home for at least six months of a tax year.
Kruger said it had recently been suggested that the Minister of Finance should, at least for the duration of the lockdown, allow home office employees to claim the reasonable setup costs and regular expenses that they incurred while having to work from home.
He said these employees were law abiding citizens, heeding the call of, and working with, the government to prevent deaths and increasing the capacity of the country’s under-resourced hospitals.
This was at a significant cost to an already suffering society, said Kruger. “This is a very sad and depressing situation as employees are working from home, not out of choice, but in order to prevent themselves and their family from contracting and spreading the coronavirus without added remuneration.”
Kruger said to be eligible to claim home office expenses against remuneration, Section 11 of the Income Tax Act stated that only a person carrying on a “trade” shall be allowed to claim the following deductions from the income derived from such trade:
• losses and expenses actually incurred in the year of assessment in the production of the income but not expenses of a capital nature; and
• expenditure actually incurred on repairs to the property occupied for purposes of that trade and machinery and other utensils used by the person for purposes of his/her trade.
“Whereas employment is included in the definition of “trade” in the Act, all the expenses mentioned above would be deductible thereby reducing the employee’s taxable income which would, no doubt, result in a refund from SARS,” said Kruger.
What not to claim for
Currently, the limitation placed on the employee in order to benefit from working at home is no real incentive at all for most of them.
The limitations are found in Section 23 of the Act and more specifically sub sections (b) and (m).
• No deduction shall be allowed for domestic, private or non-trade/employment related expenses.
• The first restriction means that the home office must only be used by that employee and nobody else and it can only be used for purposes of employment and nothing else.
• The second limitation is that no home office deduction will be allowed other than the portion of rent or bond interest relative to the percentage the floor space of the home office bears to the whole building;
• the cost of repairs specific to that home office portion; and
• wear and tear (depreciation) allowance on office equipment.
• The employee would also not be subject to a fringe benefit tax as the home office and equipment would not be used for any private purposes.
What to claim for
• More than half of the work performed must be from their home office or part of the home dedicated as a home office.
• The employee will not be taxed on the reimbursement as this is regarded as an expense incurred on behalf of the employer and not as income.
• The cost of repairs specific to that home office portion; and wear and tear (depreciation) allowance on office equipment.
• The portion of rent or bond interest, relative to the percentage the floor space of the home office bears to the whole building.
• Only set-up costs that can be claimed are the improvements directly related to the actual portion of the building occupied and used solely as a home office and for nothing else.
• The pro-rata portion of the monthly rent (or interest on the mortgage bond), rates and taxes, electricity, cleaning and the depreciation of the office equipment.
• All the other expenses listed cannot be claimed by the employee. However, these expenses can be claimed by the employer as expenses incurred in the production of the employer’s income.
• The employee can be reimbursed for the expenses by the employer.
• All the other expenses listed cannot be claimed by the employee. However, these expenses can be claimed by the employer as expenses incurred in the production of the employer’s income.
• The employee can be reimbursed for the expenses by the employer.
