How to Claim Home Office Expenses on Self Assessment in the UK

If you work from home and file a Self Assessment tax return, you are almost certainly entitled to claim home office expenses against your taxable income. Thousands of self-employed workers, freelancers, and company directors leave money on the table every year because they either do not know what they can claim or are unsure how to calculate the correct amount.

HMRC provides two approved methods for claiming home office costs: a simplified flat rate that requires no receipts, and an actual costs method that involves calculating the proportion of your household bills attributable to business use. Choosing the right method can mean the difference between a £312 deduction and a £2,000+ deduction, depending on your circumstances.

This guide covers every aspect of claiming home office expenses on Self Assessment in 2025/26, including who qualifies, what you can claim, how to calculate your deduction under each method, how limited company directors should handle the claim, and what records HMRC expects you to keep.

Who Can Claim Home Office Expenses on Self Assessment?

Home office expenses are available to several categories of UK taxpayer. The rules differ depending on your employment status and how you use your home for work.

Self-Employed Sole Traders

If you are registered as self-employed with HMRC and work from home, you can claim home office expenses on the self-employment pages of your Self Assessment return (SA103). This applies whether you work from home full-time, part-time, or use your home as an administrative base while working at client sites.

You do not need a dedicated room. HMRC accepts claims where you use a shared space such as a kitchen table or living room, provided the use is genuinely for business purposes.

Limited Company Directors

Directors of UK limited companies file Self Assessment to report their salary, dividends, and other income. However, home office expenses for directors are handled differently. The company itself claims the expense, not the individual.

Your limited company can either pay you the HMRC flat rate of £6 per week (£312 per year) tax-free with no receipts required, or reimburse you for actual costs based on a reasonable calculation. Either way, the payment is a deductible business expense for Corporation Tax purposes and is not taxable income for you.

If your company does not reimburse you, you cannot claim home office costs on your personal Self Assessment return as an employee expense. The claim must go through the company. See our dedicated guide on home office expenses for limited companies for the full breakdown.

Employed Workers Who File Self Assessment

If you are employed (not self-employed) and your employer requires you to work from home, you may be able to claim tax relief on home office expenses. This applies where your employer does not reimburse you for the additional costs.

You can claim through Self Assessment if you already file a return, or through form P87 if you do not. The relief is given at your marginal tax rate. A basic rate taxpayer claiming £312 would receive £62.40 in tax relief; a higher rate taxpayer would receive £124.80.

Important: since 6 April 2022, you can only claim if your employer requires you to work from home. Choosing to work from home for personal convenience, even if your employer permits it, is no longer sufficient. This is a change from the temporary COVID-era rules that applied between 2020 and 2022.

Who Cannot Claim

You cannot claim home office expenses if:

• You choose to work from home but your employer has a suitable workplace available for you
• You work from home only occasionally and have no regular pattern
• You are claiming the £1,000 trading allowance instead of actual expenses (more on this below)
• Your home office use is purely personal (e.g. managing personal investments)

The Two Methods: Simplified Flat Rate vs Actual Costs

HMRC gives you a choice between two approved methods. You must pick one method for each tax year. You cannot mix them within the same year, but you can switch between years.

Method 1: Simplified Expenses (Flat Rate)

The simplified expenses method uses a fixed flat rate based on the number of hours you work from home each month. This method is only available to self-employed sole traders and partnerships. It is not available to employed workers or limited company directors (though directors have a separate £6/week flat rate through their company).

Simplified Expenses Flat Rates (2025/26)

Hours Worked From Home Per Month	Flat Rate Per Month
25 to 50 hours	£10
51 to 100 hours	£18
101 hours or more	£26

If you work from home for fewer than 25 hours per month, you cannot use the simplified method.

Annual amounts at each tier:

Working Pattern	Monthly Rate	Annual Claim
25-50 hours/month (~6-12 hrs/week)	£10	£120
51-100 hours/month (~13-25 hrs/week)	£18	£216
101+ hours/month (~25+ hrs/week)	£26	£312

Advantages of the Simplified Method

• No receipts or bills required
• No complex calculations
• No risk of HMRC querying your apportionment
• Quick and straightforward to complete on your tax return

Disadvantages of the Simplified Method

• The maximum claim is £312 per year, which is significantly less than most people could claim under actual costs
• Does not cover the full range of claimable expenses
• Only available to sole traders, not employees or directors
• You must track your working hours to determine which band you fall into

Method 2: Actual Costs (Proportional)

The actual costs method involves calculating the proportion of your household running costs that are attributable to business use. This method is available to everyone: sole traders, employees, and limited company directors (through their company).

The deduction under this method is typically much higher than the flat rate, particularly if you work from home full-time or have high household costs. Claims of £800 to £2,500 per year are common. Some home workers with expensive properties claim significantly more.

The calculation has two components:

1. Total eligible household costs for the year
2. Business use proportion based on rooms, area, or time

We will cover the detailed calculation in the next section.

How to Calculate Your Home Office Deduction Under Actual Costs

The actual costs method requires you to determine what proportion of your home is used for business, and apply that proportion to your eligible household expenses. There is no single HMRC-mandated formula. You can use whichever reasonable basis best reflects your actual usage.

Step 1: Identify Your Eligible Household Costs

The following household costs qualify for a proportional home office claim:

Costs you can claim a proportion of:

Expense	Notes
Electricity	Proportional to business use
Gas / heating	Proportional to business use
Water rates	Proportional to business use
Council tax	Proportional to business use
Mortgage interest	Interest only, not capital repayments
Rent	If you rent your home
Home insurance (buildings and contents)	Proportional to business use
Broadband / internet	Business proportion or 50% if mixed use
Home phone line rental	Business proportion of calls + line rental
General repairs and maintenance	Proportional if they benefit the whole property
Cleaning costs	Proportional to business use

Costs you cannot claim:

Expense	Why Not
Mortgage capital repayments	Capital expenditure, not a running cost
Food and drink	Personal expenditure
Clothing (unless protective/uniform)	Personal expenditure
Furniture for personal rooms	Not business use
Garage costs (unless used for business)	Personal use
Garden maintenance	Personal use
TV licence	Personal use (unless used for business)

Step 2: Calculate Your Business Use Proportion

HMRC accepts several methods for calculating the business proportion. Choose the one that is most reasonable for your situation.

Method A: Room Count

The simplest approach. Divide the number of rooms used for business by the total number of rooms in your home. HMRC typically excludes bathrooms, kitchens (unless used for business), and hallways from the room count.

Formula: Business proportion = Rooms used for business / Total usable rooms

Example: You have a 4-bedroom house with a living room, dining room, and kitchen (7 usable rooms). You use one bedroom as a dedicated office.

Business proportion = 1 / 7 = 14.3%

Method B: Floor Area

More accurate than room count, particularly if rooms vary significantly in size. Measure the floor area of your office and divide by the total floor area of your home.

Formula: Business proportion = Office floor area (sq ft or sq m) / Total home floor area

Example: Your home is 1,200 sq ft. Your office is 150 sq ft.

Business proportion = 150 / 1,200 = 12.5%

Method C: Time-Based Apportionment

If you use a shared space (such as a dining table) for business, a time-based approach may be more appropriate. Calculate the proportion of hours in the day that the space is used for business.

Formula: Business proportion = Hours of business use per day / 24 (or per waking hours)

Example: You work 8 hours per day at your kitchen table, 5 days per week.

Business proportion = (8 hours x 5 days) / (24 hours x 7 days) = 40 / 168 = 23.8%

Some people prefer to use a combined approach. For a shared room, you might calculate: (room area / total area) x (business hours / total hours). This gives a more conservative and defensible figure.

Method D: Combined Room and Time

Formula: Business proportion = (Room area / Total area) x (Business hours / Total hours in the week)

Example: Your living room is 20% of your home's floor area. You use it for business 40 hours per week out of a total 168 hours.

Business proportion = 20% x (40/168) = 20% x 23.8% = 4.8%

This is a very conservative approach but virtually unassailable if HMRC queries it.

Step 3: Apply the Proportion to Your Costs

Multiply each eligible household cost by your business use proportion.

Worked Example 1: Sole Trader Working From Home Full-Time

Sarah is a freelance web developer. She works from a dedicated home office in her 3-bedroom semi-detached house. She works 5 days a week, roughly 45 hours per week, from this room.

Her home has 6 usable rooms: 3 bedrooms, living room, dining room, kitchen. Her office is one of the 3 bedrooms.

Room-based proportion: 1/6 = 16.7%

Annual household costs:

Expense	Annual Cost	Business Proportion (16.7%)	Claimable Amount
Electricity	£1,400	16.7%	£233.80
Gas	£1,100	16.7%	£183.70
Water	£480	16.7%	£80.16
Council tax	£1,800	16.7%	£300.60
Mortgage interest	£4,200	16.7%	£701.40
Broadband	£360	16.7%	£60.12
Home insurance	£320	16.7%	£53.44
Total	£9,660		£1,613.22

Under the simplified expenses method, Sarah would claim £312 (101+ hours per month at £26/month). Using actual costs, she claims £1,613 instead, saving her over £1,300 in additional deductions.

Tax saved at basic rate (20%): £322.64 Tax saved at higher rate (40%): £645.29 Tax saved including Class 4 NI (additional 6%): £396.85 (basic rate) or £719.49 (higher rate)

The actual costs method saves Sarah between £330 and £720 more in tax than the flat rate, depending on her tax band.

Worked Example 2: Part-Time Home Worker Using a Shared Space

Tom is a self-employed consultant who works from his dining room table 3 days per week. He also has a small office at a co-working space for the other 2 days. His home is a 2-bedroom flat.

His flat has 4 usable rooms: 2 bedrooms, living room, dining room (used as office). The dining room is 15% of the flat's total floor area.

Since he shares the room with his family and only uses it for business 3 days per week, he uses a combined calculation:

Combined proportion: 15% (area) x (24 hours x 3 days / 168 hours) = 15% x 42.9% = 6.4%

Annual household costs:

Expense	Annual Cost	Business Proportion (6.4%)	Claimable Amount
Rent	£14,400	6.4%	£921.60
Electricity	£960	6.4%	£61.44
Gas	£720	6.4%	£46.08
Water	£360	6.4%	£23.04
Council tax	£1,500	6.4%	£96.00
Broadband	£420	6.4%	£26.88
Contents insurance	£180	6.4%	£11.52
Total	£18,540		£1,186.56

Even with a conservative combined proportion of just 6.4%, Tom can claim £1,187 because his rent is high (London flat). The flat rate would give him only £216 (51-100 hours per month). The actual costs method saves him nearly £1,000 in additional deductions.

Worked Example 3: Limited Company Director

Rachel is the sole director of a marketing consultancy limited company. She works from a dedicated room in her 4-bedroom house, 5 days per week.

Room-based proportion: 1/7 rooms = 14.3%

Annual household costs:

Expense	Annual Cost	Business Proportion (14.3%)	Claimable Amount
Electricity	£1,600	14.3%	£228.80
Gas	£1,200	14.3%	£171.60
Water	£500	14.3%	£71.50
Council tax	£2,100	14.3%	£300.30
Mortgage interest	£6,000	14.3%	£858.00
Broadband	£480	14.3%	£68.64
Home insurance	£400	14.3%	£57.20
Total	£12,280		£1,756.04

Rachel's company pays her £1,756 per year for use of her home. This payment is:

• Tax-free in Rachel's hands (not reported on her Self Assessment)
• Deductible against the company's Corporation Tax (saving £439 at 25%)
• Not a benefit in kind (so no P11D reporting required)

Compare this to the flat rate of £312/year. The actual costs method saves Rachel's company an additional £361 in Corporation Tax and puts an extra £1,444 in Rachel's pocket tax-free.

Rachel reports this on her Self Assessment as a director, but since it is a reimbursement of actual costs, it does not form part of her taxable income.

Which Method Saves You More? A Side-by-Side Comparison

The right method depends on your household costs, working pattern, and tolerance for record-keeping. Here is a comparison at different usage levels:

Scenario	Simplified Rate	Actual Costs	Difference
Part-time home worker, small flat, low bills	£120/year	£400-600/year	£280-480 more
Full-time home worker, average house, average bills	£312/year	£1,200-1,800/year	£888-1,488 more
Full-time home worker, large house, high mortgage	£312/year	£2,000-3,500/year	£1,688-3,188 more
Full-time, high-rent London flat	£312/year	£2,500-5,000/year	£2,188-4,688 more
Part-time (2 days/week), average house	£120-216/year	£500-900/year	£380-684 more

In almost every scenario, actual costs produce a larger deduction than the simplified method. The flat rate only makes sense when your household bills are very low, you work from home only occasionally, or you cannot be bothered to keep records.

What Costs Qualify in Detail

Mortgage Interest (Not Capital Repayments)

If you own your home with a mortgage, you can claim a proportion of the interest element of your mortgage payments. You cannot claim the capital repayment portion.

Check your annual mortgage statement, which will break down how much you paid in interest versus capital during the tax year. For a typical repayment mortgage, the interest portion might be 40-60% of your total monthly payment in the early years, declining over time.

Example: Your monthly mortgage payment is £1,200. Your annual mortgage statement shows £4,800 was interest and £9,600 was capital repayment. If your business proportion is 15%, you can claim 15% of £4,800 = £720.

You cannot claim any portion of the capital repayment. This is not a running cost; it is building equity in your property.

Rent

If you rent your home, you can claim a proportion of your rent as a home office expense. This is often one of the largest components of a home office claim, particularly in London and the South East.

Example: Your monthly rent is £1,500 (£18,000/year). Your business proportion is 12%. You can claim £2,160.

Council Tax

Council tax is a household running cost and qualifies for proportional claims. Use the same business proportion you apply to other household expenses.

Be aware that if you have a dedicated room used exclusively for business, your local council could theoretically charge business rates on that room. In practice, this is extremely rare for home offices and councils almost never pursue it. The risk increases if you have external signage, receive clients at home, or employ staff at the premises.

Electricity and Gas

Energy costs are directly affected by working from home. You use more electricity and heating during working hours. Apply your business proportion to your total annual energy bills.

If you have a smart meter, you could use the actual increase in consumption during work hours as your basis, though most people use the standard room or area proportion.

Water Rates

Water is claimable on the same proportional basis as other utilities. The amount is usually small but adds up as part of the total claim.

Broadband and Telephone

If you use your home broadband for business, you can claim a proportion. Many home workers claim 50% of their broadband cost on the basis that it is used roughly equally for business and personal purposes. If you can demonstrate higher business use, you can claim more.

Business phone calls made from a personal landline or mobile are claimable at the actual cost. If you have a dedicated business line, the full cost of line rental and calls is claimable.

Home Insurance

Buildings insurance and contents insurance are both claimable on a proportional basis. If you have specific business equipment cover, the full cost of that additional cover is claimable as a business expense.

Repairs and Maintenance

General repairs that benefit the whole property (e.g. roof repairs, boiler servicing, external painting) can be claimed on the same proportional basis as other household costs.

Repairs specific to your office room (e.g. repainting the office, fixing a window in the office) can be claimed in full as a business expense.

Improvements that increase the value of the property (e.g. adding an extension, installing a new kitchen) are capital expenditure and cannot be claimed as revenue expenses. They may qualify for capital allowances if the improvement is specifically for business use.

Cleaning Costs

If you pay for a cleaner, the proportional cost attributable to business areas is claimable. If you have a dedicated office that requires cleaning, the full cleaning cost for that room is claimable.

HMRC's "Wholly and Exclusively" Test for Home Offices

The "wholly and exclusively" rule is the foundation of all expense claims in the UK tax system. For home office expenses, this rule requires nuance because your home inherently serves both business and personal purposes.

Dedicated Room vs Shared Space

Dedicated room: If you have a room used exclusively as an office, the "wholly and exclusively" test is straightforward. The room is used 100% for business, and you apply the room's proportional cost of total household expenses.

Shared space: If you work from a shared space (kitchen table, living room), you can still claim. HMRC accepts that a proportional claim based on time and area is reasonable, even though the room is not used exclusively for business. The key is that during business hours, the space is used wholly and exclusively for business.

This is one of the most misunderstood aspects of the rules. You do not need a dedicated room to claim home office expenses. You need a reasonable basis for calculating the business proportion of your household costs.

The Capital Gains Tax Risk

There is a common concern that claiming home office expenses could trigger a Capital Gains Tax (CGT) liability when you sell your home. The principal private residence (PPR) relief normally exempts your home from CGT entirely.

The risk arises only if you have a room used exclusively for business with no personal use whatsoever. In that case, the proportion of the gain attributable to that room could theoretically be excluded from PPR relief.

In practice, most home offices have at least some dual use. If your office doubles as a guest bedroom, study, or is used by family members in the evenings, it retains its domestic character and PPR relief applies in full.

How to protect yourself:

• Ensure your office has some personal use (even a bookshelf with personal books, a sofa bed for guests, or family use in evenings)
• Do not claim 100% of any room's costs unless it genuinely has zero personal use
• The proportional claim itself does not create a CGT issue. The issue only arises from exclusive business use of a clearly defined, separate room

Most accountants advise that claiming proportional home office expenses does not affect your PPR relief, provided the room is not exclusively and permanently a business premises.

Capital Allowances on Office Furniture and Equipment

Separate from the running costs claim, you can also claim capital allowances on furniture, equipment, and technology used for business in your home office. These are claimed on your Self Assessment return (sole traders) or through the company accounts (limited companies).

What Qualifies for Capital Allowances

Item	Treatment
Office desk	Capital allowance (AIA)
Office chair	Capital allowance (AIA)
Computer / laptop	Capital allowance (AIA)
Monitor(s)	Capital allowance (AIA)
Printer	Capital allowance (AIA)
Bookshelf for business use	Capital allowance (AIA)
Standing desk	Capital allowance (AIA)
Office lighting	Capital allowance (AIA)

The Annual Investment Allowance (AIA)

The Annual Investment Allowance allows you to deduct the full cost of qualifying equipment in the year of purchase, up to £1,000,000 per year. For home office equipment, you will be well within this limit.

Example: You buy a desk (£300), office chair (£250), monitor (£400), and laptop (£1,200) for your home office. Total: £2,150. You can claim the full £2,150 as a capital allowance, deducting it from your taxable profits in the year of purchase.

If the equipment is used partly for personal purposes (e.g. a laptop used 70% for business and 30% personal), you should only claim the business proportion. A laptop costing £1,200 with 70% business use would qualify for a £840 capital allowance.

Sole Traders vs Limited Companies

Sole traders: Claim capital allowances on the self-employment pages of your Self Assessment return (SA103), in the capital allowances section.

Limited companies: The company purchases the equipment (or reimburses the director) and claims capital allowances in its Corporation Tax return. The equipment is a company asset.

For more detail on capital allowances, see our complete guide to capital allowances.

How to Claim on Your Self Assessment Return

The exact process depends on your employment status.

Self-Employed Sole Traders (SA103)

Home office expenses are claimed on the Self Employment supplementary pages (SA103) of your Self Assessment return.

1. Simplified expenses: Enter the total flat rate amount in Box 51 ("Total amount of simplified expenses"). You will need to calculate: months at each tier x monthly rate.

2. Actual costs: Enter the total business proportion of each household cost in the relevant expense category. Most home office costs go in Box 30 ("Other premises costs") or can be split across the relevant categories.

You must choose one method for the entire tax year. If you use simplified expenses for home office costs, you must use simplified expenses for all home-related costs.

Employed Workers (SA100 or P87)

If you are employed and your employer requires you to work from home but does not reimburse your costs:

• If you already file Self Assessment, claim on the Employment pages using the "Expenses" section
• If you do not file Self Assessment, use form P87 (postal or online) to claim tax relief on employment expenses

The amount of relief is the expense multiplied by your marginal tax rate. A £312 claim at 20% basic rate gives you £62.40 in tax relief.

Limited Company Directors

Directors do not claim home office expenses on their personal Self Assessment. The company pays the director (as an employee) for use of their home, and the company claims the deduction. The payment does not appear on the director's Self Assessment because it is a tax-free reimbursement, not income.

The company records the payment as an overhead in its accounts and deducts it from taxable profits on its CT600 Corporation Tax return.

The £1,000 Trading Allowance Interaction

The trading allowance gives individuals a £1,000 tax-free allowance for self-employment income. If your total self-employment income is under £1,000, you do not need to register for Self Assessment or report it.

However, the trading allowance interacts with expense claims in an important way:

You cannot claim the £1,000 trading allowance AND claim actual expenses. You choose one or the other.

If your total allowable business expenses (including home office costs) exceed £1,000, you should claim actual expenses. If your expenses are less than £1,000, the trading allowance gives you a bigger deduction.

Example: Your freelance income is £8,000. Your total business expenses (including £600 home office costs) are £2,400. You should claim actual expenses (£2,400 deduction) rather than the trading allowance (£1,000 deduction).

Example: Your side-hustle income is £3,000. Your only expense is home office costs of £312 (simplified rate). The trading allowance (£1,000) gives a bigger deduction, so use that instead.

What Records Do You Need to Keep?

HMRC requires you to keep records to support your expense claims. The specific records depend on which method you use.

Records for the Simplified Method

• A log of hours worked from home each month (to determine which flat rate band applies)
• That is it. No bills, receipts, or calculations required.

Records for the Actual Costs Method

• Utility bills: Annual statements or monthly bills for electricity, gas, water, broadband
• Council tax bill: Your annual council tax statement
• Mortgage statement: Annual statement showing interest paid (not just total payments)
• Rent receipts: Monthly rent payments or tenancy agreement
• Insurance certificates: Annual premiums for buildings and contents insurance
• Calculation workings: Your business proportion calculation, showing the method used (rooms, area, time) and how you arrived at the percentage
• Floor plan or measurements: If using the area method, a note of room dimensions
• Working pattern: A record of your typical working week (days, hours, location)

Records for Capital Allowances

• Receipts or invoices for all equipment and furniture purchased
• Details of business use percentage if items have mixed business/personal use

How Long to Keep Records

HMRC requires you to keep Self Assessment records for at least:

• 5 years after the 31 January submission deadline for the relevant tax year

For the 2025/26 tax year (return due 31 January 2027), you must keep records until at least 31 January 2032.

If HMRC opens an enquiry into your return, you may need records for longer. It is good practice to keep digital copies indefinitely, as storage is essentially free.

What counts as a record:

• Original paper bills and receipts
• Scanned copies or photographs of paper documents
• Digital bills and statements (PDF or email)
• Spreadsheets showing your calculations
• Bank statements showing payments

HMRC accepts digital records. You do not need to keep paper originals if you have clear digital copies.

Common Mistakes to Avoid

Claiming Mortgage Capital Repayments

One of the most common errors. Only the interest portion of your mortgage payment is claimable. The capital repayment is not a running cost. Check your annual mortgage statement for the interest breakdown.

Forgetting to Choose a Method

You must use one method consistently for the entire tax year. You cannot claim simplified expenses for some months and actual costs for others. Decide at the start of the year and stick with it.

Over-Claiming the Business Proportion

Be reasonable with your proportion. HMRC is unlikely to challenge a 10-20% claim for a home office. A 50% claim for someone living in a 4-bedroom house with one office would invite scrutiny. Your proportion must reflect the genuine business use of your home.

Not Claiming at All

The biggest mistake. Surveys consistently show that 30-40% of self-employed workers who work from home do not claim any home office expenses. If you work from home, you are entitled to a deduction. Even the simplified flat rate requires minimal effort.

Claiming as an Employee When Your Employer Has an Office

Since April 2022, employed workers can only claim home working expenses if their employer requires them to work from home. If your employer provides a desk at their office and you choose to work from home, you cannot claim. This catches many people who claimed during COVID and assumed the rules continued.

Ignoring the Capital Gains Tax Position

While the risk is small, ensure your home office is not permanently and exclusively used for business with zero personal use. A room that doubles as a guest bedroom or personal study retains its domestic character and preserves your full PPR relief.

Home Office Expenses for Specific Situations

Landlords

If you manage rental properties from home, you can claim home office expenses against your rental income. The proportion should reflect the time and space used for property management activities. A landlord managing 3 buy-to-let properties who spends 10 hours per week on administration from a shared home office could reasonably claim 5-8% of household costs.

Multiple Self-Employments

If you have more than one self-employment, each run from home, you can claim home office expenses for each business. However, the total proportion claimed across all businesses cannot exceed the actual business use of your home. If you use your office 14% for Business A and 6% for Business B, you claim each amount separately on each SA103.

Couples Both Working From Home

If both you and your partner work from home and you each have separate businesses, you can both claim home office expenses. However, the total claimed by both of you combined should not exceed the total cost of the household expense. You cannot each claim 15% of the electricity bill if there is only one bill.

A practical approach: split the household costs 50/50 and each claim your business proportion of your half. Alternatively, one person pays the bills and claims the full business proportion, and the other person claims nothing for that expense.

Renting a Room in a Shared House

If you rent a room in a shared house and work from that room, you can claim a proportion of your personal costs (your rent, your share of bills). The business proportion applies to the costs you actually pay, not the total household costs.

The Employed Worker Claim in Detail

Form P87

If you are an employee who does not file Self Assessment, you claim through HMRC's form P87. This can be submitted online through your Government Gateway account or by post.

You will need:

• Your employer's name and PAYE reference
• Details of the expenses you are claiming
• Confirmation that your employer required you to work from home
• Confirmation that your employer did not reimburse you

The relief is processed as an adjustment to your tax code, spreading the benefit across the rest of the tax year.

Claiming Through Self Assessment

If you already file Self Assessment (e.g. because you have dividend income, rental income, or income over £150,000), you claim employment expenses on the Employment pages. The deduction reduces your total taxable income.

What Employed Workers Can Claim

Employed workers can claim the same types of costs as self-employed workers, but the amounts tend to be lower because the "required by employer" test limits who can claim.

The £6 per week flat rate (£312/year) is the simplest option for employees. No receipts required. If your actual costs are higher, you can claim the actual proportion instead, but you will need the same records as a self-employed person.

Employer-Paid Home Working Allowance

Your employer can pay you up to £6 per week (£26 per month) tax-free for working from home, without any need for receipts or evidence. If your employer already pays this, you cannot also claim tax relief on the same costs.

If your employer pays less than £6/week, you can claim tax relief on the difference. If your employer pays nothing, you can claim the full amount.

Special Rules for Limited Company Directors

Limited company directors occupy a dual role: they are both the owner and an employee of the company. Home office expenses are handled through the company, not through the director's personal Self Assessment.

The £6/Week Tax-Free Route

The simplest approach. Your company pays you £6 per week (£312/year) for working from home. No calculation, no receipts, no P11D reporting. The company records it as a business expense and deducts it from taxable profits.

This is a pure benefit: £312 tax-free in your pocket, £78 Corporation Tax saving for the company (at 25%).

The Actual Costs Route

Your company calculates the actual business proportion of your household costs and reimburses you accordingly. This requires the same calculation as for sole traders (room proportion, eligible costs, etc.).

The reimbursement must be based on a genuine calculation. HMRC can enquire about the basis of the claim, so keep your workings and supporting documents.

Benefits of actual costs for directors:

• Tax-free income for the director (often £1,500-2,500/year vs £312)
• Corporation Tax deduction for the company
• No National Insurance on either side
• No P11D reporting required (it is a reimbursement, not a benefit)

Using a Formal Licence Agreement

Some accountants recommend a formal licence agreement between the director and the company for the use of the home office. This is not strictly required by HMRC, but it adds an extra layer of documentation that supports the claim.

The agreement should specify: which room is used, the days/hours of business use, how the reimbursement is calculated, and the annual amount.

For the full guide, see home office expenses for limited companies.

How AccountsOS Handles Home Office Expenses

AccountsOS automates the home office expense calculation for UK limited company directors and sole traders. Upload your utility bills, enter your room dimensions, and the AI calculates your optimal claim under both methods so you can pick the one that saves you the most.

Your working from home tax relief is tracked automatically, and the claim is included in your annual accounts and Self Assessment preparation.

You can also use AccountsOS to track all your allowable business expenses, categorise receipts, and keep digital records that satisfy HMRC's requirements for at least 5 years.

Visit the home office expense tracker to see how much you could save.

Frequently Asked Questions

Can I claim home office expenses if I only work from home one day per week?

Yes. There is no minimum number of days per week. For the simplified method, you need at least 25 hours per month of home working to qualify for the lowest flat rate (£10/month). For the actual costs method, your business proportion should reflect the reduced usage. Working from home one day per week typically gives a proportion of around 2-4% of household costs, which may still be worth claiming if your bills are high.

Do I need a dedicated room to claim home office expenses?

No. HMRC accepts claims where you work from a shared space such as a kitchen table, dining room, or living room. The calculation method should reflect the shared nature of the space. Use a time-based or combined (area x time) proportion rather than a simple room count. A dedicated room makes the calculation simpler and typically produces a higher proportion, but it is not a requirement.

Will claiming home office expenses affect my Capital Gains Tax when I sell my house?

In most cases, no. The risk of losing part of your Principal Private Residence (PPR) relief only arises if you have a room used exclusively and permanently for business with no personal use at all. If your office doubles as a guest bedroom, study, or is used by family in evenings, it retains domestic character and PPR relief applies in full. The proportional expense claim itself does not trigger a CGT issue.

Can I claim simplified expenses and actual costs at the same time?

No. You must choose one method for the entire tax year. You cannot use simplified expenses for some months and actual costs for others. However, you can switch between methods from one tax year to the next. Most people find it worthwhile to calculate both methods before deciding which to use.

What happens if HMRC enquires about my home office claim?

HMRC may ask you to provide evidence supporting your claim. This includes utility bills, your calculation workings, and evidence of your working pattern. If your proportion is reasonable and you have records, enquiries are straightforward. The most common issue is over-claiming the business proportion. A 10-20% proportion for a typical home office is well within the range HMRC considers reasonable.

Can my limited company pay me more than £6 per week for working from home?

Yes. The £6/week is only the flat rate that requires no evidence. Your company can reimburse you for the actual costs of using your home for business, which is typically much more than £312 per year. The reimbursement must be based on a genuine calculation of actual costs, and you should keep records to support it. The payment is tax-free to you and tax-deductible for the company.

How does the £1,000 trading allowance affect my home office claim?

If you are self-employed, you can choose between claiming the £1,000 trading allowance or claiming actual expenses (including home office costs). You cannot do both. If your total business expenses exceed £1,000, claim actual expenses. If your expenses are under £1,000, the trading allowance gives you a larger deduction. Note: the trading allowance only applies to self-employment income, not employment income or director income.

Can I claim for broadband if my family also uses it?

Yes. You can claim a reasonable proportion of your broadband cost. If you use it roughly equally for business and personal purposes, 50% is a common and accepted figure. If you can demonstrate higher business use (e.g. you work from home full-time and your family rarely uses it during work hours), you could claim more. The key is that your proportion is reasonable and defensible.

What if I moved house during the tax year?

You can claim home office expenses for both properties, but only for the periods you lived at each address. Calculate the proportion for each home separately, apply it to the bills for the period you lived there, and add the two amounts together. Keep records for both properties.

Do I need to tell my mortgage lender or landlord that I work from home?

Most mortgage lenders and landlords are fine with home working, but some mortgage terms or tenancy agreements may have restrictions on business use. Check your mortgage terms or lease. In practice, occasional or administrative home working rarely causes issues. If you are running a business that involves clients visiting, stock storage, or signage, you should notify your lender or landlord. Failure to notify them does not affect your tax claim, but it could affect your insurance or tenancy agreement.

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Last updated: March 2026. This guide covers the 2025/26 tax year rules. Tax rules change regularly. Always check the latest HMRC guidance or consult a qualified accountant for advice specific to your situation.