What expenses can I claim for when working from home?

As you will see, determining if an expense is allowable can be complicated and we would recommend discussing this with and accountant to ensure you claim everything you are entitled to claim.

You will see that the rules which apply to a business being run through a limited company differ to the rules which apply to a sole trader or partnership, while the rules for employees who work from home are also different. If you are a businessowner, the decision as to whether you trade through a company or not will have a big impact on you tax position and should also be considered.

Self-employed

The basic rule for the self-employed is that you can claim expenses which are wholly and exclusively for the purpose of your business. This means that when you work from home you may claim some relief, which must be restricted for your personal use. Typically, you could claim a proportion of your costs for things like heating, electricity, Council Tax and mortgage interest or rent.

HMRC will accept a sensible, reasonable and logical method of calculating the costs and have suggested that the following factors are considered:

• How much of your home is used for business purposes, e.g. number of rooms or proportion of floor space.
• What utilities, such as electricity, have been used for your business.
• How long it is used for business purposes, e.g. four days a week, six months of the year.

Alternatively, you can use the simplified expenses method to calculate your use of home using HMRC approved flat rates. You can only use these simplified expenses if you work for 25 hours or more a month from home and the rates you can claim range from £10 to £26 per month. The flat rate doesn’t include telephone or internet expenses. You can claim the business proportion of these bills by working out the actual costs.

TaxAssist Accountants can help you work out which method is most beneficial to you.

Company directors

If you are a company owner and director and work from home, a ‘use of home’ claim cannot be made by your company as the home does not belong to the company. Companies cannot use simplified expenses to claim a flat rate for working from home expenses either. 

Instead, the company may be able to reimburse you £6 per week. You don’t need receipts to do this, the £6 per week is not taxable nor subject to national insurance contributions (NICs) and it is corporation tax deductible for the company.  

Alternatively, the company can pay you rent to use your home for the company’s business. Where the company decides to make rental payments to you, a non-exclusive rental agreement between the company and you as director should be put in place and you must report this rental income on your tax return. You can then claim a portion of relevant household expenses via your tax return. If you have high rent or high mortgage interest payments, this can be beneficial. No deduction may be claimed for mortgage capital repayments. In addition, there is a special £1,000 property allowance but this allowance is not available between connected persons. 

For most company directors, we recommend that the company reimburses £6 per week for home working to avoid complicated calculations, record keeping and disclosures. 

Employees

The general rule is that employees can claim tax relief for additional household expenses if they have to work from home, for example because their employer does not have an office and their employment contract requires homeworking. HMRC will not allow you to claim tax relief if you choose to work from home. For example, if your employment contract lets you choose to work from home some or all the time.

For an employee, the treatment of home working expenses depends on whether the employer makes a flat rate payment to the employee or to refund their incurred costs and can become complicated.

What rules have changed?

Prior to 6th April 2026, employees could claim a £6 a week flat rate allowance from HMRC if they were required to work from home. This was claimed as an income tax deduction via your HMRC online services personal tax account or via self-assessment. However, from 6th April 2026, employees can no longer claim this flat rate allowance from HMRC where the employer does not reimburse the expenses to the employee. 

Employers can still pay a £6 flat rate allowance to employees for homeworking and do not need to require receipts from employees to do so. Employees will not be taxed on this payment, and it is an allowance expense for employers’ tax purposes.  

HMRC provides a working from home checking tool to help employees determine what they may claim.

Working from home restrictions

There are instances when a claim could impact on capital gains tax (CGT) relief when you come to sell your home. Private Residence Relief (PPR) is generally available which means that when you sell your home, you will not generally pay any CGT on the gain, provided you lived in the property as your home throughout your ownership and you had no other homes.   

However, where part of your home is used exclusively for business purposes, this relief will not apply to the business proportion of the gain, and you could end up with a CGT bill to pay. The good news is that HMRC makes clear in its guidance that occasional minor business use is ignored. 

How can TaxAssist Accountants help you? 

We would be happy to discuss your plans in more detail and outline the possible allowances and deductions available to you. To make a free, initial consultation, please call 01923 944287 or use our online contact form here.

 

Last updated 8 May 2026 | First published 28 Oct 2019

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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