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Home of Tax Assessments and Compliance Services (T.A.C.S.)

Working from Home : What You Can Claim

If you're self-employed and work from home, HMRC allows you to claim a portion of your household costs as business expenses — helping reduce your taxable profit and your overall tax bill. There are two main ways to calculate these expenses: simplified flat rates or actual cost apportionment.

What Expenses Can You Claim?

You can claim a proportion of the following household costs, based on business use:

  • Heating and electricity

  • Council Tax

  • Rent or mortgage interest (not capital repayments)

  • Water rates

  • Internet and phone bills

  • Office equipment (e.g. desk, chair, computer)

You cannot claim for:

  • Personal phone calls or internet usage

  • Food and drink

  • Home improvements not related to your business

 

Method 1: Simplified Expenses (Flat Rate)

HMRC offers a flat-rate method based on the number of hours you work from home each month. This is ideal if you want to avoid complex calculations.

  • if you work between 25 to 50 hours, you can claim £10 per month

  • if you work between 51 to 100 hours, you can claim £18 per month, or

  • if you work over 101 hours, you can claim £26 per month

💡 Example: If you work 60 hours/month from home for 12 months, you can claim £216 (12 × £18) as an expense.

Note: This method does not include phone or internet bills — you must calculate those separately based on actual business use.

Method 2: Actual Cost Apportionment

If your business use of home is significant, you may claim a proportion of your actual household costs. This method requires more detailed recordkeeping but may result in a higher deduction.

To calculate:

  1. Identify the number of rooms used for business

  2. Estimate the percentage of time the room is used for work

  3. Apply that percentage to eligible bills

💡 Example: If you use one room out of four exclusively for business, and work there 8 hours/day, you might claim 1/4 of your electricity bill, adjusted for time used.

Recordkeeping Tips

  • Keep copies of utility bills, rent statements, and internet contracts

  • Maintain a log of hours worked from home

  • Document how you calculated business use proportions

  • Retain records for at least 5 years after the tax year ends

 

Where to Claim on Your Tax Return

  • If you're a sole trader, enter these expenses in the Self Assessment tax return under “business premises” or “other allowable expenses”

  • If you're a limited company director, you may need a formal rental agreement or claim a flat rate reimbursement — rules differ, so seek tailored advice

Still not sure which option is more efficient for you, no problem, get in touch and we will guide to use the best option for your business.

Self Assessment Tax Return- CIS Tax Rebate

Avoid making the wrong decision because of uncertainty. Get professional advice and start claiming the right expenses for you:

  • Fast and secure online service

  • Simplified Process

  • Support from a Licenced accountant

  • Authorised Agent

  • Free Consultation and Advice

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