Copied and Pasted from the FSP email
Your home office deductions MUST meet these 4 requirements:
In South Africa, so many businesses are run from the lounge or the garden cottage. And these small business owners turn to tax law to find ways to claim deductions that will put much-needed chunks of cash back into the business…
If you’re one of these business owners and you claim home office deductions, take note!
For home office expenses to constitute allowable deductions, they must meet the requirements in Sections 11, 23(b) and 23(m).
The expenses must:
1. NOT be of a capital nature (e.g. maintenance, rates and taxes, wear-and-tear on office equipment qualify);
2. Be directly related (and limited) to the part of house used for trade (i.e. the office part only);
3. This part of the house must be used regularly and exclusively for the trade. This means that setting a desk up in the corner of your dining room, and calling it your “home office” during the day won’t cut it!
4. If your trade is a form of employment, the income, which you receive, must be mainly (i.e. 50% +) commission, and your employer doesn’t provide you with an office to carry out your duties (in other words, your home office).