Coworking and tax deductibility: what you need to know

A recent report stated that the UK now has 4,270 coworking spaces, with the largest portion of these spaces being, unsurprisingly, in London, with 1,209 spaces.  

Coworking spaces range from desks to rent on a daily or even hourly basis, monthly subscription models, through to serviced offices which can be ideal for start-ups. 

Who uses coworking spaces? 

Coworking spaces are used by a wide range of workers including: 

• Self-employed sole traders 
• Limited company owner-directors 
• Freelancers 
• Employed individuals 

Are coworking costs tax-deductible?

The costs can be tax-deductible, but it very much depends on what category of worker you are or what business structure you have. Potentially deductible coworking costs can include: 

• Membership cost for a coworking space, chain or organisation 
• Utilities and extra services charged by the coworking space 
• Meeting room hire 
• Office consumables e.g. pay-per-sheet printing 
• Events or networking sessions held there 

Which taxes are we talking about? 

Coworking costs may be income tax deductible for: 

• sole traders 
• partners in a general partnership 
• employees (including company directors) and  
• freelancers 

The costs may be corporation tax deductible for limited companies.  

If your business is VAT-registered and the coworking space provider is VAT registered, you may also need to consider the ‘supply of land’ rules to determine if you can reclaim the VAT on the costs charged. This area of VAT is complex and you should take professional advice.  

Sole trader, freelancer or partner in a partnership 

If you use the coworking space ‘wholly and exclusively’ for the purposes of your business, the cost to use a coworking space should be tax deductible as rent for business purposes. However, if you also use the coworking space for personal purposes, HMRC is likely to disallow at least some of that cost.  

If it is your usual workplace, travel to the coworking space will not be deductible. But if it is only an occasional workplace for you and you have a regular workplace elsewhere, you may be able to claim travel expenses to the coworking space as well. See our guides to sole trader business expenses or self-employed creatives' expenses for more detail. 

Limited company 

Where a limited company pays for the use of a coworking space, subject to the same wholly and exclusively rules as sole traders, it may be tax deductible for corporation tax purposes. The company should pay the fees or costs directly, rather than a company director or employee. As with self-employed people, travel costs to the coworking space may be deductible if it is a temporary workplace.  

HMRC’s usual rule is that if you work at the coworking site for: 

• less than 24 months and  
• less than 40% of your working time 

then it is a temporary workplace.  

See our Q&A for information on mileage claims for company director travel expenses.  

Employed 

Generally, working from a coworking space rather than your employer’s office or your home will be treated as a personal choice and you cannot claim tax relief on the costs if you pay to work there. If your employer pays on your behalf, it may be a tax-deductible expense of the business.  

How can TaxAssist Accountants help you? 

If you need advice on coworking costs – or any other business expenses – and whether they are tax deductible for you or your business, call TaxAssist Accountants on 0800 0523 555  or use our online contact form to book a free initial consultation. 

Last updated: 24th July 2026