Tax Claims for Contract Work

greg_SA

greg_SA

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Hi,

I have been doing some contract work for another company in addition to my normal job. I am paid as an individual for the contract work, and the company pays income tax to SARs on my behalf.

Is it possible to make an expense claims in my tax return for this contract work? Can I claim petrol, or laptop, etc that was bought to do the work?

Just wondering if it is worth seeing a tax consultant...

Thanks,
Greg
 
Depends, which one of the following are you:

Hourly rate contractor, Fixed term contractor or Independant contractor
 
I was paid at an hourly rate... I had to claim at the end of the month for the number of hours spent.
 
Gnome said:
Depends, which one of the following are you:

Hourly rate contractor, Fixed term contractor or Independant contractor
Click to expand...

These aren't necessarily mutually exclusive, are they?!?
 
Gnome said:
Depends, which one of the following are you:

Hourly rate contractor, Fixed term contractor or Independant contractor
Click to expand...


rubbish a contractor is a contractor.

greg pm me i will help you.
 
If you earn 50% or more in commission you would be able to claim for those expenses, also depends on what you do full time. Otherwise the amount you earn full time + the contract work will be added to your total income and will push your tax bracket up and is posible that you have to pay in to SARS when tax returns are due.

@Celine - I really hope you not giving an advice like the one for money market vs RA :D
 
Why not post here instead of PM for others who might be seeking similar info?
 
Faetsa said:
If you earn 50% or more in commission you would be able to claim for those expenses, also depends on what you do full time. Otherwise the amount you earn full time + the contract work will be added to your total income and will push your tax bracket up and is posible that you have to pay in to SARS when tax returns are due.

@Celine - I really hope you not giving an advice like the one for money market vs RA :D
Click to expand...


he is NOT earning commission. read his post properly.
 
Mike Hoxbig said:
Why not post here instead of PM for others who might be seeking similar info?
Click to expand...


because i can't be bothered with people who think they know it all and they don't know anything and want to quote sections of the act randomly. also because of posts like faetsa's that is totally incorrect where he/she is saying that all income is added together and taxed.

if you earn income from A in the form of salary and income from B in the form of commission, you will be allowed to claim expenses against income B. it is a totally seperate income from A and cannot be calculated whether it is more than 50% or not. the only time the 50% or more comes into affect is when you are earning a salary and commission from one company.
you are also entitled to claim expenses if you are a contractor and are only employed with one company as long as the IRP 5 certificate indicates that the income is 3616. interpretation note number 17 of march 2010 clearly states this fact. also nowhere does it state that a person must be earning income from more than one source if they are a contractor. where this has come from i have yet to find it written yet these accountants and tax consultants out there are telling these people they cannot claim the expenses against their income.
 
Strange, at our work place it matters which kind of contract you have. Hourly rate and Fixed term contractors can't deduct anything except medical aid we were told.

Yet the guys who work as independent contractors deduct cars, driving, medical aid, the list goes on.

I'm a fixed term contractor, what can I actually subtract from tax?

Can I subtract a new car purchase from tax for example?
 
I am on a year contract too.

Would love to claim transport but I was told no cannot as I don't travel to clients but just drive to the same company every day

If you don't have the deduction listed on your salary slip you can't claim AFAIK.
 
I think it is important that you have the 3616 code on ur IRP5, which generally means u r an independent contractor. Why there is a difference, is beyond me, but its just another way SARS uses to milk the tax payers
 
@Celine - Hahaha... You didn't tell us you were a financial advisor or you have anything to do with the industry, in fact you denied it in your previous posts because everybody said you were wrong! I don't want to argue with you, my only problem is that you won't give proper advice as proved many times in this forum! What really gets to me is that your knoledge and advice is scarry but you want to give advice to other people!!! Don't you think it's weird that other people in this forum also in this industry and even people that are not always pick on you, why do you think that is? From all your posts my impression is that you don't have any qualifications or much knoledge in what you do and it seems to me that you are living in another world.

because i can't be bothered with people who think they know it all and they don't know anything and want to quote sections of the act randomly. also because of posts like faetsa's that is totally incorrect where he/she is saying that all income is added together and taxed.
Click to expand...
I'm sorry to burst your buble but I have a BCom and currently finishing my CFP degree as well, I'm a RFA, registered tax practitioner, registered with the board for medical schemes, registered with the life assosiation, I have been in the business for a few years and I'm currently managing over R73 000 000 besides other business, I'm also trading in futures in my personal capacity! Obviously I don't know what I'm talking about!

By the way these income codes and interpretation notes look believable if only you could explain them :D It also makes sense that incomes are added pushing your tax bracket up, don't you think otherwise people would make a plan with their companies to split their salaries and pay minimal tax? Besides if your second job is working on a computer at another company what expenses can you claim in the production of that income? Don't embarrass yourself! When you are 100% sure give advice, if you not then don't!!!

Anyhow, I don't want to fill this post with more unnecessary words, I'm not going to answer to anything that Celine might say. It's nothing personal, I just believe that you can't give advice on something that you don't know or not sure of, I honestly can't stand incompetence.
 
Faetsa said:
@Celine - Hahaha... You didn't tell us you were a financial advisor or you have anything to do with the industry, in fact you denied it in your previous posts because everybody said you were wrong! I don't want to argue with you, my only problem is that you won't give proper advice as proved many times in this forum! What really gets to me is that your knoledge and advice is scarry but you want to give advice to other people!!! Don't you think it's weird that other people in this forum also in this industry and even people that are not always pick on you, why do you think that is? From all your posts my impression is that you don't have any qualifications or much knoledge in what you do and it seems to me that you are living in another world.


I'm sorry to burst your buble but I have a BCom and currently finishing my CFP degree as well, I'm a RFA, registered tax practitioner, registered with the board for medical schemes, registered with the life assosiation, I have been in the business for a few years and I'm currently managing over R73 000 000 besides other business, I'm also trading in futures in my personal capacity! Obviously I don't know what I'm talking about!

By the way these income codes and interpretation notes look believable if only you could explain them :D It also makes sense that incomes are added pushing your tax bracket up, don't you think otherwise people would make a plan with their companies to split their salaries and pay minimal tax? Besides if your second job is working on a computer at another company what expenses can you claim in the production of that income? Don't embarrass yourself! When you are 100% sure give advice, if you not then don't!!!

Anyhow, I don't want to fill this post with more unnecessary words, I'm not going to answer to anything that Celine might say. It's nothing personal, I just believe that you can't give advice on something that you don't know or not sure of, I honestly can't stand incompetence.
Click to expand...


mike - here is your answer to your question to me. this person has no clue who i am or where i come from or what i do and he/she is giving me the run down on his/her varsity degrees blah blah blah.
see now why i can't be bothered with this kind of thing.

faetsa please stay out of my way as you know nothing of me or what i do. do not reply to anymore of my posts or respond to anymore of my advise to the members of this forum.

to the members of the forum should you wish to continue with my "service", as stated in the past, free of charge, please pm me.

thank you kindly.

the end.
 
I am an hourly contractor and can claim transport costs if it is used for work purposes like fetching a part for the bosses car or something or having to drop a worker in town.

I am doing accounting there
 
Sigh, can't get anything but arguments in this thread. SARS sends employees to our office every year, should have gone this year and asked them these questions.

If anyone figures it out, please elaborate on how contracting matters, because I know for a fact that I have been told by our HR I cannot deduct anything as I'm not an independent contractor. So contract type surely does matter?
 
Point is.. you say you where paid as an employee with PAYE deducted... so my guess is that you will not have the independant contractor code on your IRP5... therefore no expenses deductable.. you could always arrange for this to be changed in future... or split your normal salary into basic salary plus a travel allowance....it is possible to change your past IRP5 too...but this requires some effort from the employer... if you where paid as independant contractor you would of not paid PAYE... before shot down...im senior audit manager at an audit firm...

Sent from my HTC Vision using MyBroadband Android App
 
Quote for you:

Independent Contractor
Income earned by an independent contractor is
specifically excluded from the definition of
remuneration in Paragraph 1( ii) of the 4 th
Schedule. Such income is however included in
the definition of gross income in Section 1 .
In distinguishing between an employee and an
independent contractor / trader one must
commence with an analysis of the employment
contract. The object of the contract (or the
parties ' rights and obligations under the
contract) must be established.
The object of the contract is not a mere
indicator , but determines the legal nature of the
contract. The object to be established is the
pre -eminent object, for example —
If the object is the surrender of productive
capacity (whether capacity to provide a service
or to produce things), then the contract is for
employment of an employee. The essence of an
employee ’s contract (contract of service) is the
placing of one person’ s services (labour ) at the
disposal of another, enabling the acquisition of
that service itself and not simply the fruits of
that productive capacity.
If the object is the acquisition of the result of
deployed productive capacity (of a produced
thing or of a provided service ), then the contract
is for the employment of an independent
contractor . The essence of an independent
contractor ’s contract (contract for services or
work ) is that the independent contractor only
commits himself / herself to deliver the product
or end result of that capacity .
Exceptions: The 4th Schedule prescribes that
the independent contractor ’s income will be
deemed to be remuneration and will therefore
be subject to employees' tax , if —
An independent contractor is controlled and
supervised as to the manner in which his / her
duties are performed or to be performed or as
to his / her hours of work ; or
An independent contractor is paid at regular
daily, weekly, monthly or other intervals.
The employer, being a party to the employment
contract, is in the best position to determine
whether or not the employee is an independent
contractor . SARS has therefore provided certain
guidelines in order to assist the employer with
this responsibility. These guidelines are
available in Interpretation Note 17 and can be
obtained on the website www .sars. gov.za under
Interpretation Notes / Income Tax.

Sent from my HTC Vision using MyBroadband Android App
 
Gnome said:
Sigh, can't get anything but arguments in this thread. SARS sends employees to our office every year, should have gone this year and asked them these questions.

If anyone figures it out, please elaborate on how contracting matters, because I know for a fact that I have been told by our HR I cannot deduct anything as I'm not an independent contractor. So contract type surely does matter?
Click to expand...


you need to look at your contract with your employer and determine whether you are an independent contractor or not. there are two statutory tests that need to be looked at when determining this:

The statutory tests

The exclusionary subparagraph (ii) of the definition of the term “remuneration” provides two statutory tests to conclusively deem a person not to be an independent contractor for employees’ tax purposes. The tests provide for a deeming provision that a person shall not carry on a trade independently if the services or duties are required to be performed mainly at the premises of the client and –

the worker is subject to the control of any other person as to the manner in which the worker’s duties are or will be performed, or as to the hours of work (for purposes of this test the comments relating to “control” under 9.1.1 would be relevant);
or the worker is subject to the supervision of any other person as to the manner in which the worker’s duties are or will be performed, or as to the hours of work (for purposes of this test the comments relating to “supervision” under 9.2.1 would be relevant).

Where any of these tests apply positively, the independent contractor is deemed not to be an independent contractor and the amount so received by him or her is, therefore, not excluded from remuneration. It is not necessary for both tests to be applicable in a particular situation. The application of only one of them would trigger the deeming provision.

this is taken from "interpretation note number 17 of march 2010" and was sent to me by the legal department HO SARS.
 
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