What Expenses Can I Claim for Working from Home?
A practical, no-jargon guide for UK sole traders and limited company directors. Learn HMRC rules, simplified versus actual cost methods, what you can claim, and how to keep compliant records.
Working from home is now common for UK small businesses, freelancers, landlords, and company directors. If you use your home regularly for work, HMRC allows you to claim a fair portion of your running costs or a simplified flat rate. Choosing the right method can improve your tax position while staying compliant.
Who can claim home-working expenses?
- Self-employed sole traders who work from home on a regular basis.
- Limited company directors who perform duties from home and incur costs.
- Landlords and contractors who do substantive admin from a home workspace.
Important: Occasional emails from the sofa do not qualify as regular business use. HMRC expects genuine, ongoing use of part of your home for work.
Allowable costs you can claim
Where there is regular business use, you can usually claim a fair proportion of the following:
- Utilities: electricity, gas, and where relevant, water.
- Housing costs: rent or mortgage interest (not capital repayments), and Council Tax.
- Internet and phone: business portion of broadband and landline or mobile.
- Workspace upkeep: cleaning and minor repairs to the work area.
- Office needs: desk, chair, monitor, printer, stationery, postage.
- Software: Xero, Microsoft 365, video conferencing, antivirus.
- Insurance: professional indemnity or business contents cover.
Two ways to claim: simplified vs actual costs
Option 1: HMRC simplified expenses (flat rate) for the self-employed
Instead of calculating proportions of bills, sole traders can use HMRC’s monthly flat rate based on hours worked at home:
| Hours worked at home in the month | Monthly flat rate |
|---|---|
| 25 to 50 hours | £10 |
| 51 to 100 hours | £18 |
| 101 hours or more | £26 |
This is simple to apply but can be less generous if your actual household costs are high.
Option 2: Actual cost apportionment for the self-employed and companies
Work out the business share of each relevant bill using a reasonable basis that reflects space and time used.
Example method: If you use 1 room of a 5-room home for 8 hours a day out of 24, your apportionment could be:
1/5 (rooms) × 8/24 (hours) = 1/15 of eligible running costs.
Keep your calculation basis consistent through the tax year and retain workings with your records.
If you are a limited company director
- Claim a modest home-working allowance through payroll or expenses of £6 per week (£26 per month) without receipts; or
- Get reimbursed for a supportable share of actual costs with calculations and bills.
- In some cases, a formal licence agreement between you and your company can be used. Take advice first to avoid Capital Gains Tax or business rates issues.
Records to keep
- Utility bills, internet and phone statements, and relevant invoices.
- Calculation notes showing room and time apportionment.
- Evidence of business use (hours worked at home, calendar notes).
- Any agreements with your limited company regarding workspace use.
Worked example: turning costs into tax savings
Annual running costs for electricity, gas, and broadband total £1,800. One room of five is used for business for 8 of 24 hours.
Claimable amount: £1,800 × (1/5) × (8/24) = £120.
If you are a basic-rate sole trader (20%), that one category saves £24 in tax. Add other categories and the savings increase.
Related guides
FAQs: working-from-home expenses
Can I claim electricity and gas if I work from home?
Yes. You can claim a reasonable proportion of utilities that relate to your workspace when you work from home regularly for business. Keep your calculation notes and bills.
What is the HMRC flat rate for working from home?
Self-employed people may use £10, £18, or £26 per month depending on hours worked at home in the month (25–50, 51–100, or 101+ hours).
Can limited company directors claim home-working expenses?
Yes. A director can claim £6 per week without receipts or be reimbursed for a supportable share of actual costs. Consider advice before using any licence agreement with your company.
Can I claim mortgage costs?
You can claim a proportion of mortgage interest only, not capital repayments. Renters can apportion rent instead.
Do I need a dedicated office room?
No, but you must have regular and substantive business use. If a space is used both privately and for work, apportionment should reflect that mixed use and time.