SARS - Tax

The South African Revenue Service (SARS) has announced the opening of the filing season for individual taxpayers. The season for individual tax filing began on Thursday, July 1, and will end on November 23. It correlates with the impact of Covid-19, which has caused more people to work from home than ever before. Taxpayers who are unable to file electronically can do so by appointment only at a SARS branch, as the agency has temporarily suspended its physical locations.

Individuals who traditionally file by eFiling or the SARS MobiApp will not be affected by the temporary closure of tax branches, according to the statement.

Beginning July 1, 2021, these taxpayers are advised to continue doing so digitally (Save With Digital Tax The Right Way in 2021). Branch filing, on the other hand, will not begin on this day.

“The need for numerous workers to work remotely has been required in an unprecedented manner by the Covid-19 pandemic,” stated South African Revenue Service (SARS) commissioner Edward Kieswetter.

“We recognize that many firms and employees are attempting to build a new normal which is correct and acceptable. We just humbly ask that people think about the long-term implications of classifying a portion of their main property as a home office for tax reasons. It could be better to wait until you’ve established a more stable routine before making a decision”

Edward Kieswetter

He stated that the law is unchanged as before the Covid-19 epidemic. According to the commissioner, as of July 1, SARS had received slightly over 1,500 tax returns with claimed home office costs, of which over 1,300 had been blocked for verification, and the current risk classification accuracy in this area is 50%.

Kieswetter highlighted that making claims in this area will result in trade-offs in future submissions. He also mentioned that working from home has saved people money on routine expenses. On a pro-rata basis, the home office area will be excluded from the R2 million primary residence deduction when the house is sold.

“Before filing a claim for home office expenses, careful consideration should be provided. Taxpayers may also discover that working from home saved them money on expenses they would have incurred otherwise, such as transportation, vehicle wear and tear, and so on.

SARS has updated its website www.sars.gov.za with information on home office expenses.

Remember the following when deciding to whether claim for applicable home expenses on SARS:

  • At the primary house, an office must have been set up with the necessary equipment.
  • The office needed to be used on a regular basis and exclusively for work purposes.
  • In the income tax return, home office expenses must be reported under source code 4028.
  • More than half of the employee’s responsibilities must have been performed away from the employer’s office, or if the employee earns more than half of their remuneration from commission or other variable payments based on work performance, more than half of the employee’s responsibilities must have been performed away from the employer’s office.

“Where the home office is located on the taxpayer-owned property, taxpayers should be aware that formally identifying a portion of a principal residence as a home office will almost certainly have a negative impact on a future capital gains determination,” SARS stated.

“These savings, when combined with the loss of a portion of the capital gains deduction, may balance the benefit of claiming home office expenses,” it stated.

SARS emphasized that while all claims for home office expenditures may be subject to additional verification or audit, it is important to keep in mind that a taxpayer who claims home office expenses for the first time is likely to qualify for verification or audit.

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