Can You Claim Working From Home Expenses?

Who this guide is for

This guide is for sole traders, freelancers, landlords and limited company directors who work from home and want to understand what can be claimed.

It is especially useful if your business is run from a spare room, home office or mixed-use space.

Working from home as a sole trader

Sole traders may be able to claim a proportion of household costs where part of the home is used for business.

This can include costs such as electricity, heating, internet and other relevant household expenses, depending on the method used and the facts.

Some sole traders use simplified expenses, which apply flat rates based on hours worked from home. Others calculate a business proportion of actual costs.

Working from home through a limited company

If you run a limited company, the company is separate from you personally.

The company may reimburse certain home-working costs, but the rules are different from sole trader claims. Directors should be careful before charging large portions of household bills to the company.

In some cases, a formal rental or licence arrangement may be considered, but this can create wider tax and legal consequences. It should not be done casually.

Employee home-working relief

From 6 April 2026, employees cannot claim personal tax relief for working from home. Eligible claims for the previous four tax years can still be made. This is separate from sole-trader business expenses and employer reimbursement rules.

Directors who are also employees of their company should not assume that all employee rules apply in the same way as sole trader expense rules.

What costs might be relevant?

Depending on the business and structure, working from home costs may include:

• electricity and heating
• business phone and internet use
• office supplies
• business software
• office furniture
• repairs to a business area
• a reasonable use of home amount

The cost must be connected to the business and supported by records.

Avoid overclaiming

Working from home claims should be proportionate.

If a room is used partly for business and partly personally, only the business element should be considered. Claiming a whole room as exclusively business may also create other tax considerations, including potential Capital Gains Tax issues when selling the property.

This is why many small businesses prefer simple, modest and well-evidenced claims.

Common mistakes

A common mistake is claiming personal household costs as if they were fully business expenses.

Another mistake is copying rules from sole trader guidance into a limited company without checking the company position.

Some business owners also fail to keep evidence, such as bills, calculations and notes explaining how the business proportion was worked out.

What to do next

Before claiming working from home expenses:

1. Identify whether you are self-employed, employed or operating through a limited company.
2. Decide whether simplified or actual-cost methods may apply.
3. Keep household bills and business-use calculations.
4. Avoid claiming private costs.
5. Review any formal rent arrangement with an accountant.
6. Keep the claim reasonable and consistent.