Source and the Remote Worker

• Pages: 1-6
• Author: David Clegg
• Published date: 01 March 2022
• DOI: 10.10520/ejc-btclq_v13_n1_a2
• Date: 01 March 2022

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© Siber ink

Source and the Remote

Worker

DAVID CLEGG*

ABSTRACT

This article considers the meaning of source in relation to the now common

practice of an employee working ‘remotely’ from a location far from his or

her former off‌ice, while reporting to that off‌ice/employer as before. The

question arises whether the source of the earnings from that remote work is,

as traditionally accepted, the work itself or, instead, the delivery of that work

to the employer’s off‌ice. In the former case the source would be located at

the employee’s remote location, whereas in the latter it is arguably located at

the employer’s off‌ice.

The question is of signif‌icance to the tax liability of the employee if he

or she works from a tax jurisdiction different to that in which the off‌ice is

located.

Introduction

The locus classicus of statements on source is to be found in Lever Bros:1

‘the source of receipts, received as income, is not the quarter whence they

come, but the originating cause of their being received as income and … this

originating cause is the work which the taxpayer does to earn them. … The

work which he does may be a business which he carries on, or an enterprise

which he undertakes, or an activity in which he engages and it may take the

form of personal exertion, mental or physical, or it may take the form of

employment of capital either by using it to earn income or by letting its use to

someone else. Often the work is some combination of these.’

The term ‘work’ is expanded upon in this extract by example, but in the

context of an individual working alone only two categories of work are

mentioned, namely … ‘personal exertion, mental or physical’. The further

question therefore arises, can these categories in turn be unpacked in

greater detail? The question is important in the case of mental (but not

physical) exertion because of the growing incidence of what has become

known as ‘remote working’, which f‌irst became possible with the develop-

ment of the telephone and then the internet, and now has become preva-

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* Tax Consultant, Cape Town.

CIR v Lever Bros and Unilever Ltd 1946 AD 441 at 449, 14 SATC 1.