My client has an IRP5 from an employer for 12 months of the 2015 tax year. In addition to that he has a second irp5 from another entity coded 3616 for a period of 5 months running simultaneously with the 1st irp5 as mentioned. He has stated that the indep
Important:
This answer is based on tax law for the year ending 28 February 2016.
Answer:
Section 23(m) (of the Income Tax Act) doesn’t apply where the individual rendered the services in the course of a trade carried on independently (as required by proviso (ii) to the definition of remuneration in paragraph 1 of the Fourth Schedule to the Income Tax Act). This is because the individual then didn’t derive remuneration (as required by section 23(m)). The fact that the individual derived remuneration (code 3601) from a different person (employer), is irrelevant.
To the extent that section 23(m) doesn’t apply the individual will be able to make the deductions allowed under the Income Tax Act.
The relevant law, with regard to domestic premises used for trade purposes, is found in section 23(b). The deductibility of expenses relating to a home office is determined by reference to section 11, in particular paragraphs (a), (d) and (e), read together with sections 23(b) and 23(m). This means that for a home office expense to be deductible the requirements of sections 11, 23(b) and 23(m) must all be met.
The current practice generally prevailing is Interpretation Note: No. 28 (Issue 2).