Millions of self-employed people in the UK work from home — either full-time or part-time. HMRC allows you to claim a proportion of your home costs as a business expense, but the rules can be confusing. Here’s exactly what you can claim.
The Simplified Flat Rate Method
HMRC offers simplified flat rates for home working: £10/month for 25–50 hours/month, £18/month for 51–100 hours and £26/month for 101+ hours. These are straightforward to calculate and require no complex apportionment.
💡 Key takeaway
HMRC’s ‘use of home’ flat rate is £10/week — claiming actual costs requires careful calculation of floor space and hours used for work.
The Actual Cost Method
Alternatively, you can claim a proportion of actual home costs — heating, electricity, broadband, rent or mortgage interest, council tax — based on the number of rooms and hours used for business. This often gives a higher claim but requires more calculation and record-keeping.
What’s Included in Actual Costs?
You can claim a proportion of: heating and electricity bills, broadband (business proportion), home insurance (business proportion), and if renting — rent. Mortgage interest is more complex — you can claim interest only, not capital repayment, and only for the business proportion.
What You Cannot Claim
You cannot claim for rooms used exclusively for personal purposes. If you use a room sometimes for work and sometimes for personal use, you can only claim during working hours. Any room used exclusively for business may trigger capital gains tax implications when you sell the property.
Equipment and Furniture
Equipment bought exclusively for business use — computer, desk, chair, printer — can be claimed in full as a business expense (or through the Annual Investment Allowance for larger items). Keep receipts for everything.
Frequently Asked Questions
Can I claim mortgage interest as a home office expense?
If you work from home, you can claim a proportion of mortgage interest (not capital repayment) as a business expense. The proportion is based on rooms and business hours.
What if I rent a room to use as an office?
If you rent a dedicated office space from home or elsewhere, the rent is fully deductible as a business expense.
Which method gives a higher claim — flat rate or actual costs?
It depends on your home costs and hours worked. For most people with significant home costs, actual costs give a higher deduction. Your bookkeeper can calculate both to see which is more beneficial.
