New guidance issued spells out documentation needed for tax claims.
With tax-filing season coming to a close, SARS has published an updated guidance note on claiming for home office expenses.
Under the note, which has been published for public comment, employers are required to provide a letter to an employee, which includes information on the period that work from home was allowed and dates on which the employee did not report to the office.
The employer letter to SARS confirming an employee’s work from home arrangement should also:
- Be on the letterhead of the employer with their registration details including the PAYE number.
- Provide the employee details and specify the period (start and end dates) when the employee was allowed to work from home.
- Where possible, indicate the dates during the year that the employee reported to the employer’s premises.
The guidance notes that the use of a home office equipped for work purposes is allowed as a deduction for employees who would have in a normal period worked from the employer’s offices.
These deductions must meet legal requirements and an additional requirement for employees is that they must spend more than 50 percent of their working time in the home office in a year of assessment. For employees who earn mainly commission, more than 50 percent of their working time must be spent outside of the employer’s premises.
During a verification of home office expenses by SARS, the revenue service may request evidence that duties are performed mainly in the dedicated office space.
Supporting evidence in this context would include a signed confirmation letter from the employer with their employer registration details, the employee’s details, information relating the duties that the employee will perform, the date when the employee was permitted to start working from home and if relevant the date such permission was withdrawn, and if available, the days that the employee did not report to the employer’s premises.
