DEAR VALUED CLIENT,
It has now been 15 months since we went into lockdown and in many economic sectors, we have seen a significant recovery. However, we will only start to see a glimmer of the life we knew once most of our people have been vaccinated.
As we are amid a third wave, we encourage you to continue practicing the necessary safety protocols: Avoid crowded areas as far as possible, wear a mask in public and wash your hands regularly.
Our deepest sympathies go out to those who have lost loved ones or their livelihoods.
DAILY OPERATION:
Over the past 15 months, our team has continuously looked at how we can continue to provide our clients with excellent service, and also where we can improve their experience. We do not believe that challenges such as load shedding and lockdown should be an excuse for bad service.
Even before the initial lockdown, all our files were digitized and securely stored in the cloud. As long as we have internet access this allows us the opportunity to access client information and complete service requests from anywhere in the world. This feature helped us significantly during the hard lockdown when we all had to work from home.
We have also installed an UPS that will ensure our internet and phone line stays operational during load shedding.
Furthermore, we have noticed that since most product provider/insurer’s staff is still working from home, there are unfortunately delays in response times. For this reason, we have employed another administrative assistant to help ensure our client’s service requests are prioritized and attended to in a timely manner.
We would like to use this opportunity to introduce you to our newest team member, Jana Pienaar.
Welcome Jana, we are confident that you will have a long and fruitful career in the financial planning industry.
Please also continue to follow our facebook page for regular updates: https://www.facebook.com/tvzfinancialservices/
SAVINGS & INVESTMENTS:
If we look at the performance of the ALSI & Money Market this year compared to last year we can clearly see that Money Market has decreased significantly and the ALSI has increased significantly:
1 January 2020 – 23 June 2020
ALSI Money Market
-5.58% 3.27%
1 January 2021 – 23 June 2021
ALSI Money Market
10.48% 1.88%
1.These percentages indicate that you must stay committed to your long-term investment strategy.
2.The ALSI does recover over time.
3.The ALSI offers significantly higher REAL returns over the longer term.
SHORTTERM INSURANCE:
We encourage you to read through your policy schedules and summaries carefully and let us know if there are any questions or important information we should know about as this could affect the outcome of any claims submitted.
Please make sure to let us know if there have been any material changes that could affect your short-term policy: Items such as: change in address, change in security details, change in driver of vehicles etc.
RISK INSURANCE:
Old Mutual recently relaunched their retrenchment cover product along with other new features to their risk products. The Retrenchment cover pays up to 60% of your salary for a period of 6 months in case of retrenchment.
Covid19 has had a devastating impact on our economy which led to many retrenchments. Should you be concerned about your own job security, please contact us for more information on this product.
Another great benefit of Old Mutual’s new Protect range is the option to stop paying life insurance premiums when you retire.
Over the years we have seen many pensioners unable to afford their life insurance premium after retirement.
By selecting this option, you can already address this problem while still working, if the benefit start date is not within 10 years of the retirement date.
Feel free to contact us should you want more information on this benefit.
TAX:
Tax season will officially open on 1 July 2021. Over the past couple of weeks, we have attended webinars and studied numerous communications relating to expenses that can be claimed if you work from home.
Unfortunately, SARS has not significantly amended their rules to accommodate those who were forced to work from home during the lockdown period, thus the rules that are currently in place are similar to the strict ones that were there before lockdown.
Below are some key points that were highlighted:
• SARS stipulates that you can only claim if your home office is an exclusive and specifically equipped dedicated area solely used for work purposes (If the room is used for leisure or has furniture not related to work purposes). If you and your spouse shared this space, you do not qualify either as the space is then not specifically equipped for your trade alone.
• The taxpayer must provide proof that the home office is used exclusively for work purposes (Building plans, photos).
• Another requirement is that you had to have worked from home for more than 50% of the tax year. You can also only claim expenses for the months that you worked from home.
• Should you qualify SARS will need plans of the house to confirm exact percentages of the floor plan that is used for the home office (this cannot be an estimate). The whole house (garages included as well as any flats) must be considered in this calculation. For example, if the whole property is 200m² and your home office is 20m², then you can claim 10% as home office expenses.
• SARS also stipulates that a letter from the employer alone confirming you worked from home is not sufficient proof you did in fact work from home (working on the road or in a coffee shop is not considered as a home office), therefore if you have any other proof like timesheets this can be added to the supporting documents.
• You cannot claim for stationary, cell phone costs, internet costs or office equipment (only commission earners can claim for these. Salaried earners are required to claim these expenses from their employers).
• You can only claim in relation to costs incurred assigned to the fixed property:
1. Rent or interest on the bond (then a bond statement must be supplied)
2. Maintenance (repairs), but it should be in relation to the home office (As per SARS communication:
Any repairs to the property must have some relation to the home office in order that the deduction is not prohibited. For example, if the garage interior or bathroom is repainted, or a window in the master bedroom repaired, no portion of such repair may be claimed, as that expense will not have been incurred for the part of the premises occupied for trade.
If, on the other hand, the entire roof of the property has to be repaired because it is in a state of disrepair, then the cost of such repair, apportioned based on the floor area, may be claimed as a home office deduction.)
3. Expenses in relation to the fixed property – cleaning services and electricity
4. Rates and taxes, sewage, refuse and levies
5. Wear and tear to the building itself
• Unfortunately, you cannot deduct bond/credit life insurance or home contents, you can only claim homeowner’s insurance that insures the property/building.
• Only a percentage of the expenses mentioned above can be claimed as calculated according to the floor plan. For example, if it is calculated that your home office is 10% of the entire building, you can claim 10% of the allowed expenses. Therefore, if all expenses are a total of R10 000, then you can only claim 10% of R10 000. This amount will then be deducted from your taxable income (you will not receive the full R1000 as a refund).
• SARS have already indicated that they will be scrutinizing every expense claimed which will most probably imply that those claiming for home office expenses will be audited and requested to provide supporting documentation (audits can take approximately 3 months if no additional documentation is requested).
We ask that you please be patient with the tax submission process as we have many tax returns to submit. You can rest assured that your tax return will be handled with the utmost care.
PLEASE STAY SAFE & TAKE CARE OF YOURSELVES & YOUR LOVED ONES
Top from left to right: Antoni, Liza, Marco
Bottom from left to right: Janneri, Jana
Kind Regards
TvZ Financial Planning Team