Sign up with GoogleI'm looking for some guidance with regards to provisional tax and home office expenses as per the below scenario:
My wife is a full time employee of a medical practice within a hospital setting, for which she is paid a fixed salary for seeing patients that have been admitted to the hospital, and overtime for any patients seen over weekends and public holidays. So far so simple.
However, since starting at this practice she has also been seeing "private" patients in her personal capacity. Until recently this has been small scale, either doing home visits to see the patients or seeing them at her employer's premises (With her employers blessing). She charges these patients and receives payments from them directly. Until recently this additional income has been minimal.
About two months ago things have changed in the following two ways:
1. We converted our granny flat into an area where she can see patients. She uses this for patients that want to make bookings outside of her normal working hours, especially over weekends. The house was a joint purchase.
2. She is being contracted by a local special needs school to provide services for several hours twice a week (Again, with her employers knowledge), for which she invoices the school in her private capacity.
Change number 2 above, assuming it continues, will result in a significant second source of income for her. The school is treating her as a service provider and not an employee.
Questions:
1. Does she need to register as a provisional taxpayer because of (2) above? At the moment she plans on declaring the income from the school contract as additional income in her yearly tax return and paying in whatever is assessed (although since her medical aid and RA contributions come out of her net pay she has till now been getting money back from the tax man).
2. Since she is exclusively utilising part of the property for the purposes of working in her private capacity, will she be able to claim the relevant portion of our utility bill and interest on the bond as home expenditure against her second income?
Any advice would be appreciated.
My wife is a full time employee of a medical practice within a hospital setting, for which she is paid a fixed salary for seeing patients that have been admitted to the hospital, and overtime for any patients seen over weekends and public holidays. So far so simple.
However, since starting at this practice she has also been seeing "private" patients in her personal capacity. Until recently this has been small scale, either doing home visits to see the patients or seeing them at her employer's premises (With her employers blessing). She charges these patients and receives payments from them directly. Until recently this additional income has been minimal.
About two months ago things have changed in the following two ways:
1. We converted our granny flat into an area where she can see patients. She uses this for patients that want to make bookings outside of her normal working hours, especially over weekends. The house was a joint purchase.
2. She is being contracted by a local special needs school to provide services for several hours twice a week (Again, with her employers knowledge), for which she invoices the school in her private capacity.
Change number 2 above, assuming it continues, will result in a significant second source of income for her. The school is treating her as a service provider and not an employee.
Questions:
1. Does she need to register as a provisional taxpayer because of (2) above? At the moment she plans on declaring the income from the school contract as additional income in her yearly tax return and paying in whatever is assessed (although since her medical aid and RA contributions come out of her net pay she has till now been getting money back from the tax man).
2. Since she is exclusively utilising part of the property for the purposes of working in her private capacity, will she be able to claim the relevant portion of our utility bill and interest on the bond as home expenditure against her second income?
Any advice would be appreciated.
