Quick answer
If you are an employee required to work from home, you can claim a flat £6 per week (£312 a year) in tax relief with no evidence needed, or your actual additional household costs if they are higher. If you are self-employed, you use HMRC’s simplified expenses bands of £10, £18, or £26 per month, or apportion your real household bills by room and time.
Is a home office tax deductible in the UK?
The additional cost of working from home is deductible, but the route depends on whether you are employed or self-employed. For employees, HMRC tightened the rules in the 2022-23 tax year: relief is only available where your employer requires you to work from home, not where you choose to. A contractually home-based role or an employer with no office qualifies; hybrid working by preference does not.
For the self-employed, the home office is an allowable business expense under the usual “wholly and exclusively” test. You can deduct the business proportion of your household running costs against your trading profit. See the wider UK expense rules for how this sits alongside other deductions.
How much can you claim?
Employees have two options. The flat rate of £6 per week (£312 per year) needs no records at all. Alternatively, you can claim the actual extra cost of heating, lighting, and metered water for the room you work in, but you must keep evidence and the calculation is rarely worth the effort below a few hundred pounds.
The self-employed choose between simplified expenses and actual costs:
| Hours worked from home per month | Simplified flat rate |
|---|---|
| 25 to 50 hours | £10 per month |
| 51 to 100 hours | £18 per month |
| 101 hours or more | £26 per month |
Worked example. A self-employed designer works from home 120 hours a month. Using simplified expenses she claims £26 a month, £312 for the year. If her actual apportioned costs (a share of energy, broadband, and council tax across the one room she uses out of five) came to £900, she would be better off claiming actual costs instead and keeping the supporting bills.
Record-keeping requirements
If you use the flat rate or simplified expenses, you do not need to keep utility bills, only a note of the basis you used. If you claim actual costs, keep your energy, water, broadband, and council tax bills, plus your apportionment workings. The self-employed must keep them until five years after the 31 January Self Assessment deadline; employees claiming through PAYE should keep theirs until at least the end of the tax year after the one the claim relates to, and longer is prudent because HMRC can open an enquiry within set time limits.
How to claim, step by step
- Decide whether you are claiming as an employee or as a self-employed trader.
- Employees: confirm your employer requires you to work from home, then claim £6 per week through Self Assessment, the online P87 service, or form P87.
- Self-employed: pick simplified expenses or actual apportioned costs, whichever is higher, and apply it consistently across the year.
- If using actual costs, apportion each bill by the number of rooms used for business and the proportion of time they are used for work.
- Record the figure in the relevant box of your tax return and retain your workings.
- Avoid claiming exclusive business use of a room unless you understand the capital gains consequences.
Common mistakes
- Claiming the flat rate as an employee who only works from home by choice. This no longer qualifies after the 2022-23 rule change.
- Mixing the flat rate and actual costs in the same year. Pick one method per tax year.
- Apportioning by floor area only. HMRC expects both a space and a time apportionment for dual-use rooms.
- Claiming exclusive business use, which can trigger a capital gains charge on part of your home.
- Forgetting that employees cannot claim rent, mortgage interest, or council tax, only the marginal running costs.
Software that helps
Keeping the apportionment evidence together is what turns a defensible home office claim into a five-minute job at year end.
- FreeAgent tracks home office use as a recurring journal and is bundled free with some business bank accounts.
- ExpenseFlow captures your energy, broadband, and council tax bills, codes each one with the correct VAT treatment, and syncs them to Xero or QuickBooks, so the source records behind a home office claim sit in one place rather than a shoebox.
- Coconut is aimed at sole traders and rolls simplified expenses into the quarterly tax estimate.
FAQ
See the answered questions above for the flat rate, the required-to-work test, rent and mortgage apportionment, capital gains, and how to file the claim.