Claiming Home Office Expenses: What’s Allowed?
As home working becomes an integral part of the modern professional landscape, particularly for self-employed individuals and company directors, understanding the tax reliefs available is essential. Both sole traders and directors of limited companies can claim expenses related to working from home, but it’s vital that these expenses meet HMRC’s strict criteria for business use.
Who Can Claim Tax Relief?
You may be eligible to claim tax relief on additional household expenses if:
Your job requires you to live far from your employer’s office.
Your employer does not have a physical office.
You must work from home for all or part of the week, not out of personal preference.
🚫 Who Cannot Claim?
You cannot claim tax relief if:
You choose to work from home.
Your employment contract permits homeworking but doesn’t require it.
You work remotely due to office space being full, or because of past COVID-19 arrangements.
📑 What Can You Claim For?
You can claim for work-related costs only. This includes:
Business phone calls.
A proportion of gas and electricity used in your home office.
You cannot claim for:
Rent or mortgage payments (unless under specific arrangements for self-employed).
Broadband access or services used for both personal and business purposes.
You can make claims for the current tax year and up to four previous years.
💷 How Much Can You Claim?
A flat rate of £6 per week (£312 per year), no receipts required.
Or, claim the exact amount you’ve spent, with evidence.
Example:
If you’re a basic rate taxpayer (20%) claiming £6 per week, you’ll get £1.20 a week back in tax relief.
🧾 Self-Employed? Here’s What You Need to Know
Working from home is one of the perks of self-employment – but it comes with its own rules.
You can claim for:
Office equipment – computers, desks, chairs.
Renting part of your home to your business (either via flat rate or formal rental agreement).
Mortgage interest, council tax, and utilities – proportional to business use.
Repairs directly related to your work.
Internet and telephone costs – where a separate contract or usage record is maintained.
📌 Important: You cannot claim for mortgage repayments – only the interest portion.
📊 Simplified Expenses for Sole Traders
HMRC allows flat rate claims based on the number of hours worked from home per month:
You may also claim additional expenses for internet and phone separately.
🏢 Limited Company Owners: Claiming Home Office Costs
You have two main options:
HMRC Flat Rate:
Claim £6 per week (£312 annually) without needing receipts.Formal Rental Agreement:
Rent part of your home to your business. This allows higher claims but comes with added responsibilities:Must be a realistic commercial rent.
A formal agreement must be signed by both parties.
May affect Capital Gains Tax if you sell your property in future.
Warning: Without an agreement, HMRC may treat rental income as additional salary, subject to tax and National Insurance.
📱 Claiming Mobile & Internet Costs
For full relief on mobile bills, contracts must be in the company’s name.
Internet costs can be included only if exclusively used for business or covered under a rental agreement.
Shared usage = no claim unless you apportion the expense carefully.
✔️ Summary
When working from home, always ask:
“Is this expense wholly, exclusively and necessarily for business purposes?”
Keep clear records, and if in doubt, consult a professional accountant to ensure compliance with HMRC’s rules. Working from home might offer flexibility, but with the right knowledge, it can also offer significant financial benefits.
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