The individual is a lecturer. Receives a monthly salary and has an IRP5 from Employer ‘A’ that reflects all the necessary information which appears to be correct – I have no query regarding that. The individual has a second IRP5 from Employer ‘B’ – (AHPCS
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
In order to provide the guidance required, we would need to know the code used on the IRP 5. If the code is 3601, it would explain why the return doesn’t allow you to capture the expenses. If the code is 3616, as we believe it should be, the position would be different and the return should open up the expenses, or one must make the deductions in the trade part of the return. The income is also entered and the amount on the IRP5 is captured in the block under “Income Reflected on an IRP5/IT3(a) regarded to be Trading Income”. This avoids double counting of the amount.
Note: code 3616 is used for “remuneration paid to an independent contractor”. Our guidance assumes that the client is in fact carrying on an independent trade as required – see the relevant proviso to the definition of remuneration in paragraph 1 of the Fourth Schedule to the Income Tax Act and also Interpretation Note 17. The individual would then be able to make the deduction – under section 11(a), if all the requirements are met, and section 23(m) would not apply.