If you are a self-employed person working from home, there are different work-related business expenses that you can claim. HMRC allow you to charge your ‘work from home’ costs to your business and claim tax relief on them.
There are two methods of calculating your claim – the simplified expenses method OR calculate the Full Cost and calculate the claim’s proportion.
You can calculate your allowable expenses using a flat rate based on the hours you work from home each month. However, you can only use simplified expenses if you work for 25 hours or more a month from home. These are the flat rates provided by HMRC based on the number of hours worked from home each month:
| Hours of business use per month | Flat rate per month |
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 and more | £26 |
You do not need to provide any records of the household expenses you’re claiming relief for when using the flat rate.
Even though the ‘simplified method’ is the easiest and quickest way to calculate your allowance, you can miss out on taking advantage of some of your tax relief.
When using this method to claim home office expenses, you can deduct some business costs to work out your taxable profit if they are allowable expenses. In that case, you must take your time to calculate each cost and claim a percentage of the actual costs.
You may claim a higher sum if your actual costs are higher than the flat rate. In that case, you must prove to HMRC that by way of a ‘fair and reasonable’ calculation:
This method is more complicated – you will need the help of an accountant who will help you increase the amount claimed and reduce the tax bill incurred.
Self-employed allowable expenses are ‘wholly and exclusively business-related’. They do not include money taken from your business to pay for private purchases.
You can claim:
You may also charge these home office costs (when used exclusively on the home office) to your business:
It is important to bear in mind that the flat rate does not include telephone or internet expenses. You can claim the business proportion of these bills by working out the actual costs.
You cannot claim personal expenses for things that you use privately. If you use something for business and personal reasons, you can only claim allowable expenses for the business costs.
You cannot claim – expenses paid by a partner or spouse, personal phone calls costs, and expenses that do not have receipts.
The amount you can claim for utility bills depends on:
Please use our calculator to get your work from home allowance.
As a self-employed business owner, you must keep records of your business transactions.
To claim your expenses, add up all your allowable expenses for the tax year and put the total amount on your Self-Assessment tax return. Even though you do not need to send in proof of costs incurred when you submit your tax return, you should keep the records to show them to HM Revenue and Customs (HMRC) if asked.
