Working from home is no longer a luxury; it’s become the norm for freelancers, small business owners, and self-employed professionals across the UK. But with your kitchen table doubling as a desk or a spare room transformed into an office, it’s only fair to ask: Can I claim anything back? The good news is, yes, you can, whether you’re after a quick claim through simplified expenses or want to dive into the details of actual costs.
In this article, we will walk you through everything you need to know about using your home as an office, including how much you can claim, what the rules are, and which method gives you the best tax advantage. Let’s make sure you don’t miss out on money you’re entitled to.
Can I Claim for Using My Home as an Office in the UK?
Absolutely, if you’re self-employed, a sole trader, or a company director, and you use part of your home for business purposes, you’re likely eligible to claim tax relief or allowances. In fact, thousands of professionals across the UK reduce their tax bills each year by doing just that.
But it’s not a one-size-fits-all situation.
You may be eligible to claim if:
- You run your business from home, either full-time or part-time
- You regularly carry out business activities at home (e.g, admin, calls, or client work)
- You dedicate part of your home as a workspace
You cannot claim if:
- You work from home occasionally by choice
- You work for an employer who offers office space
- You have no meaningful business activity conducted from home
Whether you’re after a home office allowance, simplified expenses working from home, or a detailed claim based on actual usage, there are options available.
Method 1: Simplified Expenses: A Quick & Easy Option
What Are Simplified Expenses?
Simplified expenses are a flat-rate system introduced by HMRC that allows you to claim a fixed monthly amount for working from home, without the need to calculate the exact proportion of your utility bills used for business.
It’s a fast, fuss-free method ideal for sole traders and partnerships, as long as you work from home at least 25 hours per month.
Note: This method isn’t available to limited companies. However, directors and employees can still use these figures to determine company reimbursement.
Flat Rates Breakdown
| Hours Worked per Month | Flat Rate You Can Claim |
| 25 – 50 hours | £10 per month |
| 51 – 100 hours | £18 per month |
| 101+ hours | £26 per month |
These rates cover a portion of household costs like heating, lighting, and electricity, but not telephone, broadband, or rent, which must be calculated separately if needed.
Example Calculation
Let’s say you worked 40 hours per month from home for 10 months, and 60 hours for 2 months:
- 10 months x £10 = £100
- 2 months x £18 = £36
- Total claim = £136
That’s £136 knocked off your taxable profit, no receipts or calculations needed.
Who Should Use This Method?
Simplified expenses are ideal if:
- You’re self-employed and want a quick, HMRC-approved way to claim
- You consistently work 25+ hours from home monthly
- Your household costs are average, and the flat rate feels fair
But if your home office costs more to run, for instance, you use lots of equipment or heating, you might be better off calculating the actual costs.
Method 2: Calculating Actual Costs For More Accuracy
What Can Be Claimed
If you want to claim more than the flat rate, or you’re ineligible for simplified expenses, the actual cost method is the way to go. This method allows you to claim a proportion of your household bills, based on how much of your home you use for business.
You can claim a percentage of:
- Gas, electricity, and water bills
- Council tax (if you’re not using the rent-a-room scheme)
- Mortgage interest or rent (on business-used space)
- Broadband and phone bills (business usage only)
- Insurance and cleaning costs
- Repairs and maintenance for work-related areas
How to Calculate Business Use of Home?
Follow these steps:
- Count the number of usable rooms in your home (exclude hallways and bathrooms)
- Identify how many rooms are used for business
- Estimate how much time the room is used for work (e.g, 80% business, 20% personal)
- Calculate your total household bills
- Divide costs per room, then apply your estimated percentage for business use
- Multiply to get your allowable expense
Example:
Let’s say your home has 5 rooms, one of which you use 80% for work. If your yearly electricity bill is £1,000:
- £1,000 ÷ 5 rooms = £200 per room
- £200 x 80% business use = £160 claimable
Repeat this for each applicable expense.
Important Notes
- Keep all receipts and records of calculations
- Review and update figures each tax year
- Claim only what’s reasonable and backed by evidence
Is This Method Worth It?
This method is worth considering if:
- Your business use of home is high (e.g, full-time remote work)
- Your utility bills are significantly affected by your work
- You want to claim items not included in simplified expenses (like rent)
However, if you’re not confident with calculations or your usage is minimal, the flat rate may save you time, and possibly even more money, depending on your circumstances.
Directors and Limited Companies: What Can You Claim?
If you’re a director of a limited company, the rules around using your home as an office are slightly different than those for sole traders.
You can’t claim fixed household costs like mortgage interest, rent, or council tax personally. However, your limited company can reimburse you for certain business-related expenses, provided these are wholly, exclusively, and necessarily incurred for business purposes.
Allowable Claims for Directors:
- A portion of electricity and gas is used while working from home
- Business phone calls or mobile use
- Broadband (business-use percentage only)
- Stationery and small office equipment
You can either:
- Use the HMRC flat rate method to work out what your company reimburses you
- Or claim actual costs, keeping records and receipts
Although you can’t personally claim the home office allowance, your company can treat these reimbursements as valid business expenses, reducing its taxable profit.
Renting Your Home Office to Your Own Company
Yes, it’s possible, if done properly. As a director, you can rent a room in your home to your company, and the company can deduct this as a legitimate expense.
How It Works:
- Create a formal rental agreement between you and your company
- The rent charged must reflect the market rate for similar workspace
- The rented room must be used primarily for business
Important Considerations:
- Rental income must be declared on your Self Assessment
- You may lose part of your Capital Gains Tax exemption when selling your home, due to exclusive business use
- If your room is dual-purpose (used for both work and personal use), it could help retain tax-free status upon sale
Who Should Use This Method?
This approach can be effective if you:
- Have a room dedicated to business
- Run your business full-time from home
- Want your company to cover part of your housing costs legitimately
Just be aware of the extra paperwork and long-term tax consequences.
Tax Relief for Employees Working from Home
If you’re employed by a company but work from home, you may be eligible for home working tax relief, but only if it’s a requirement of your role, not a personal choice.
Who Can Claim:
- Your employer has no office
- You are contractually required to work from home
- You live too far from the employer’s premises due to job demands
Who Can’t Claim:
- You work from home by preference
- The office is full, or your contract gives you the option
What You Can Claim:
- A flat rate of £6 per week (or £312 per year)
- Or claim actual costs (you’ll need to provide evidence)
Example Tax Relief:
If you pay tax at 20% and claim the £6 weekly allowance, you’ll get back £1.20 per week, or around £62.40 per year.
It’s not huge, but it adds up and requires no receipts or detailed calculations.
Home Office Allowance: Summary Table
| Method | Eligibility | What You Can Claim |
| Simplified Expenses | Self-employed, 25+ hours/month at home | £10–£26/month based on hours worked |
| Actual Cost Method | All self-employed or limited companies | Proportional share of bills & expenses |
| Director Reimbursement | Company directors working from home | Electricity, phone, internet (business use) |
| Rent to Your Company | Directors with dedicated workspace | Rent (must be declared as income) |
| Employee Tax Relief | Employees required to work remotely | £6/week flat rate or actual extra costs |
Record Keeping and Compliance
No matter which method you use, good record keeping is essential:
- Keep a log of hours worked from home
- Record business use percentages of bills
- Store receipts, utility bills, and calculation breakdowns
- Review your workspace usage annually, especially if circumstances change
In case of an HMRC audit, having clear evidence will make the process painless and keep your claims secure.
Summing Up
If you’re pressed for time and your home office costs are relatively low, simplified expenses may be the easiest route. But if you have high running costs or use your home for business extensively, taking the time to calculate actual expenses may offer greater tax savings.
If you’re a limited company director, consider whether renting part of your home makes financial sense, but do so carefully, with legal agreements in place.
And if you’re an employee working remotely, don’t overlook the simple £6/week tax relief you may be entitled to. If you don’t know how to claim your tax relief, get in touch with Sigma Chartered Accountants & Tax Advisors, which offer expert Tax management services.
No matter your setup, understanding your entitlements and choosing the right method can save you money and keep your tax return accurate and stress-free.
FAQs
Q: How much can I claim for using my home as an office in the UK?
Ans: It depends on your working hours and method. Flat-rate claims range from £10 to £26 per month, or more if you use actual cost calculations.
Q: Can directors claim a home office allowance?
Ans: Not directly, but your company can reimburse you for certain costs, or pay rent for a home office under a formal agreement.
Q: What is the easiest way to claim working from home?
Ans: The simplified expenses method is the easiest, offering fixed rates without needing to split utility bills.
Q: Does working from home affect Capital Gains Tax?
Ans: Yes, if a room is used exclusively for business, you may lose CGT private residence relief on that part when you sell.
Q: Can I claim for broadband and phone use?
Ans: Yes, but only the business-use percentage. Personal usage cannot be claimed.
