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Thread: Tax implications of working from home

  1. #1
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    Tax implications of working from home

    Hi all,

    I need some advice and thoughts on the tax implications of working from home.

    I know that there are implications with regards to income tax, capital gains tax and VAT. I have summarised what I see the implications to be below each point. I would really appreciate additions to these and any comments on what I already have?

    1) Income Tax
    1.1) You may deduct certain expenses relating to the space that you are working from

    2) Capital Gains Tax
    2.1) When you sell your house, you may not get the full primary residence relief if you used a portion of your home for business use (and claimed expenses relating to this for tax)

    3) VAT (if you are registered for VAT)
    3.1) If you claim VAT on expenses incurred for your home based business, you have to pay this VAT back once you sell your house.

    Thank you so much!

  2. #2
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    You are basically right, but remember 2 & 3 are relevant and restricted to (1), and
    Expense for the business is often income for the home owner, and
    In the case of (3) there is no impact at all, and
    In the case of (2) it is only relevant to a recoupment of costs included in the cost of the asset applied in the CGIT calculation.

    The real question is; what do you intend to claim as expenses?

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    It is basically stuff like rent, portion of water and lights, portion of Telkom account...

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