In short
- You can claim a flat rate (simplified expenses) or a fair share of your actual household costs.
- The flat rate needs at least 25 hours of business work at home each month.
- Telephone and internet costs are claimed separately, as a business-use share of the actual bills.
The basic rule
Allowable expenses are costs incurred wholly and exclusively for running your business. If a cost has some private use, you can only claim the business part, and you need records to back it up.
Option 1: the flat rate (simplified expenses)
If you work at home for at least 25 hours a month, you can claim a fixed monthly amount instead of working out your actual costs:
| Hours worked at home each month | Flat rate for the month |
|---|---|
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 or more | £26 |
The flat rate does not include telephone or internet costs. You can claim the business share of those bills as well.
Example: 40 hours a month for 10 months and 60 hours a month for 2 months gives 10 × £10 + 2 × £18 = £136 for the year.
Option 2: a share of your actual costs
You work out a reasonable business share of your household costs, for example by the number of rooms you use for work or by how much time you spend working at home. Costs you can apportion include heating, electricity, Council Tax, mortgage interest or rent, and internet and telephone use. Mortgage interest can be claimed in part, but mortgage repayments cannot.
HMRC’s example: a home with 4 rooms, one used only as an office, and an electricity bill of £1,120 a year. A quarter share is £280. If the office is only used one day a week, the claim is £280 ÷ 7 = £40.
Phone and internet
Claim only the part used for business. If your mobile bill is £50 a month and 30% of the use is business, that is £15 a month. Keep a note of how you worked out the percentage.
Which option is better?
It depends on your household costs and how much time you work at home. The flat rate is simple and needs less record keeping. Actual costs can be higher if your bills are significant. It is worth working out both once.
Records to keep
- Household bills (energy, rent or mortgage interest, Council Tax, internet, phone)
- A simple log of the hours you work from home, if you use the flat rate
- A note of how you calculated your business-use share
Working-from-home costs can be included in your bookkeeping and year-end figures. See services and fees.
Sources
This guide is general information, not personalised tax advice. Rules, thresholds and dates can change, so check GOV.UK or get advice on your own circumstances.