Can I Claim Home Internet as a Business Expense?
Yes - you can claim a reasonable proportion based on business use.
What HMRC Says
If you work from home, you can claim a proportion of household bills including broadband, based on the business use percentage.
When You Can Claim
- A proportion of your home broadband based on business use hours
- A separate business broadband line (100% claimable)
- Mobile data used for business purposes
When You Cannot Claim
- 100% of your home broadband if used personally too
- Netflix or streaming services
- Gaming or entertainment internet use
Good to Know
How to calculate: Hours worked from home ÷ Total waking hours, OR rooms used for business ÷ total rooms
Understanding Home Internet Expenses
If you work from home through your limited company, you can claim a proportion of your home broadband costs as a business expense. The principle is that the internet connection serves a dual purpose - business and personal - so you need to apportion the cost fairly. HMRC does not prescribe a single formula, but they expect the method to be reasonable and consistently applied.
There are two common approaches to calculating the business proportion. The first is the time-based method: divide the number of hours you use the internet for work by the total hours it is in use (including personal use by you and your household). For example, if you work 8 hours a day and the broadband is used for personal purposes for another 4 hours, business use is roughly 67%. The second approach is the room-based method used for other home office costs, though this is less directly applicable to broadband since it serves the whole house. Most accountants find the time-based method more defensible for internet specifically.
The cleanest approach, if your budget allows, is to install a separate business broadband line. If the contract is in your company's name and the line is used exclusively for business, 100% of the cost is deductible with no apportionment needed. This removes any ambiguity and simplifies record-keeping, though it does mean paying for two broadband connections.
For VAT-registered companies, you can reclaim the business proportion of VAT on your broadband bill. The bill must be in your name (or your company's name) and you need to keep the invoices. If the bill is in your personal name, the company can still reimburse you for the business portion, but VAT recovery is more straightforward if the bill is in the company name.
One option many directors overlook is the simplified expenses flat rate. Rather than calculating actual proportions of broadband and other household costs, you can claim the HMRC flat rate of £6 per week (£26 per month, £312 per year) for working from home. This covers all household running costs including broadband, heating, and electricity. For most people paying £40-80/month for broadband alone, the proportional method yields a higher claim, but the flat rate involves less paperwork and no record-keeping for individual bills.
Real-World Examples
Sole director working from home full-time
David runs his consulting business from his spare bedroom. His broadband costs £55/month. He works from home 5 days a week, roughly 8 hours a day. He estimates business use at 60% (accounting for his family's personal use in evenings and weekends). He claims £33/month (£396/year) through his company.
Director installs a separate business line
Priya's company installs a dedicated fibre broadband line in her home office, contracted in the company name at £45/month. Since it is exclusively for business use, 100% is deductible. She also reclaims the full VAT on each monthly bill. Her personal broadband remains a separate household cost.
Part-time director using the flat rate
Alex works from home three days a week for his limited company. Rather than calculating proportions of broadband and utilities separately, he uses the HMRC flat rate of £6/week (£312/year). This is simpler but covers all home working costs combined, not just broadband.
Home broadband with heavy personal use
Fiona works from home but her household of four uses the broadband heavily for streaming, gaming, and schoolwork. She estimates only 25% business use. On a £60/month bill, she claims £15/month (£180/year). Being conservative is wise here - overclaiming invites scrutiny.
Common Mistakes to Avoid
- Claiming 100% of home broadband when the household uses it for personal purposes - HMRC expects a reasonable apportionment reflecting actual use
- Using the flat rate (£6/week) AND claiming proportional broadband costs on top - you must choose one method or the other, not both
- Failing to keep broadband invoices or bills as evidence - you need documentary proof of the cost you are apportioning
- Not adjusting the business proportion when circumstances change, such as working from an office three days a week instead of five
Frequently Asked Questions
What percentage of home broadband can I claim as a business expense?
There is no fixed percentage - it depends on your actual business use. Calculate the proportion of time you use the internet for business versus personal use. Common claims range from 25% to 75%. Whatever figure you use, be prepared to justify it if HMRC asks.
Can I claim broadband if I also work from an office?
Yes, but only for the days you genuinely work from home. If you work from home two days a week and from an office three days, your business use proportion should reflect that. You cannot claim for days when you are not using the home broadband for work.
Is it better to use the flat rate or calculate actual broadband costs?
For most directors, calculating actual costs yields a higher claim. The flat rate of £6/week (£312/year) covers all home working costs combined. If your broadband alone costs £50/month and you claim 50% business use, that is already £300/year just for broadband, before adding electricity and heating.
Can my company pay for home broadband directly?
Yes. Your company can pay the broadband bill directly or reimburse you. If the contract is in the company name and used exclusively for business, it is fully deductible. If it is a shared personal and business connection, only the business proportion is allowable.
Do I need to keep receipts for broadband expenses?
Yes. Keep your monthly broadband bills or invoices, and document how you calculated the business use proportion. If the bill is paid by direct debit, download invoices from your provider's website. HMRC can ask for this evidence during an enquiry.
Source: HMRC BIM47820 - Specific deductions: use of home: calculation of amounts
Stop guessing what you can claim
AccountsOS automatically categorizes your expenses and tells you exactly what's claimable. No more missed deductions.
Try Free for 14 Days