Can I claim tax relief for working from home?

Yes, if you work from home regularly. Sole traders can claim a proportion of household costs (heating, electricity, internet, council tax, rent/mortgage interest) or use simplified expenses. Employees can claim up to £6/week without evidence if their employer requires them to work from home. The key distinction is 'required to' vs 'choose to' — employees who simply prefer working from home cannot claim.

How much is working from home tax relief?

For employees: £6/week flat rate (tax relief of £1.20/week for basic rate taxpayers, £2.40/week for higher rate). For sole traders using simplified expenses: £26/month if working 25-50 hours from home, £18/month for up to 25 hours. Sole traders can alternatively claim actual proportional costs, which is usually more beneficial.

Can limited company directors claim for working from home?

Yes. If you work from home for your limited company, the company can pay you up to £6/week (£26/month) tax-free with no evidence required. Alternatively, the company can reimburse you for a proportional share of actual household costs — but you need records to justify the amounts.

Working From Home Tax Relief UK — Claim Back What You're Owed | PocketWise

Working from home has become standard for many UK workers. Whether you are employed, a sole trader, or a limited company director, there are legitimate ways to reduce your tax bill for the costs of working from home.

Who Can Claim?

Status	Can Claim?	Condition
Sole trader	Yes	Work from home for business
Limited company director	Yes	Company reimburses or pays allowance
Employee (required by employer)	Yes	Employer requires you to work from home
Employee (choose to)	No	Choosing to work from home is not enough
Hybrid worker	Depends	Can claim for days required to work from home

For Sole Traders

Option 1: Simplified Expenses (Flat Rate)

Monthly Hours Worked From Home	Monthly Deduction
25–50 hours	£18
51–100 hours	£26
101+ hours	£36

Pros: Simple, no receipts needed, easy to calculate. Cons: Usually less beneficial than actual costs.

Option 2: Actual Costs (Proportional)

Calculate the proportion of household expenses attributable to business use:

Expense	Annual Cost (Example)	Business Use (Example 20%)	Claimable
Gas/electricity	£2,000	20%	£400
Council tax	£1,800	20%	£360
Water	£500	20%	£100
Broadband	£400	75%	£300
Home insurance	£300	20%	£60
Rent (if renting)	£12,000	20%	£2,400
Mortgage interest (NOT capital)	£6,000	20%	£1,200

How to calculate the proportion:

Method	Calculation
By room	If 1 of 5 rooms is used as an office = 20%
By time	If used as office 8 hours/day = 33%
Combined	Room proportion × time proportion

Simplified vs Actual: Comparison

Scenario	Simplified (Full-Time)	Actual (20% Proportion)
Annual deduction	£432 (£36 × 12)	£1,420–£4,820
Record keeping	None	Receipts/evidence needed
Complexity	Very simple	Moderate

Actual costs are almost always more beneficial for full-time home workers. Use simplified expenses if you work from home only occasionally.

For Employees

When You Can Claim

Scenario	Can Claim?
Employer has no office space for you	Yes
Employer requires you to work from home	Yes
You live too far from the office	No
You choose to work from home	No
Hybrid — employer requires some home days	Yes (for required days)

How to Claim (Employees)

Method	Amount	Evidence
Flat rate	£6/week (£312/year)	No evidence needed
Actual costs	Proportional household costs	Full records required

Tax Relief Calculation (Flat Rate)

Tax Band	Weekly Relief	Annual Relief
Basic rate (20%)	£1.20/week	£62.40/year
Higher rate (40%)	£2.40/week	£124.80/year
Additional rate (45%)	£2.70/week	£140.40/year

Claim via:

Self Assessment tax return (if you file one)
P87 form (if you do not file Self Assessment)
Online portal for the current and previous 4 tax years

For Limited Company Directors

Option 1: Flat Rate Payment

Component	Detail
Amount	Up to £6/week (£26/month)
Tax treatment	Tax-free for the director; corporation tax deduction for company
Evidence needed	None for this amount
How to pay	Company pays director; record in accounts

Option 2: Reimbursement of Actual Costs

Component	Detail
Amount	Proportional share of actual household costs
Tax treatment	Tax-free for director if evidenced; corporation tax deduction for company
Evidence needed	Yes — detailed records, invoices, calculations
Risk	HMRC may challenge if amounts seem excessive

Option 3: Rent a Room to Your Company

Component	Detail
How it works	You charge your company rent for use of a room
Tax treatment	Rental income for you (may use Rent a Room relief up to £7,500)
Corporation tax	Deductible expense for the company
Complexity	Higher — needs formal licence agreement

Capital Gains Tax Warning

If you use part of your home exclusively for business:

That area could be subject to Capital Gains Tax when you sell
Private Residence Relief may not fully apply
Solution: Use the room for both business and personal purposes (even occasionally)

What You Cannot Claim

Cost	Claimable?
Mortgage capital repayments	No (interest only for sole traders)
Food and drink	No
Clothing (non-uniform)	No
Furniture for personal rooms	No
Garden maintenance	No
Repairs to non-business areas	No

Equipment and Furniture

Separate from home expenses, you can claim for items bought for work:

Item	Tax Treatment
Desk, chair (sole trader/company)	Deductible expense
Computer, monitor	Deductible expense (or capital allowance)
Stationery, printer	Deductible expense
Software/subscriptions	Deductible expense

For more on self-employment expenses, see our self-assessment guide and tax allowances guide.