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For a healthy mind, body and business

Your Work From Home expenses: What can you claim?

man working from home in home office

With April comes a new financial year and thoughts turn to getting accounts and finances in order. One of the big changes for a lot of people in recent years is where they work. There has been a huge increase in people now being based at home. Here, we look at the work from home expenses you can claim so that you aren’t left out of pocket. There are differences depending on whether you work remotely for an employer or whether you are self-employed and work from home.

This article looks at the work from home expenses and tax relief rules in the UK. Other countries may have similar arrangements. You will need to double check the specifics in the country where you pay tax.

As ever, when it comes to finances, we always recommend consulting a professional accountant who can advise you on your own situation. This is not intended as financial advice.

Work from home expenses: Employee

There are only certain situations when you can claim tax relief on work from home expenses if you are employed by an organisation.

If your organisation does not have an office and you have to work from home, or if your job means you have to live far away from your office, then you may be able to claim tax relief.

If you choose to work from home or it is an option as part of your contract, it is unlikely you will get tax relief. It is really just for people who are required to work from home all the time.

The items you can claim for include:

  • Household costs such as heating and lighting.
  • Business phone calls
  • Some travel when needing to travel from home to a workplace

It is important that these costs are only for the additional costs incurred by you working from home. You can’t claim for your entire heating bill. For ease, most employees are entitled to a deduction of £6 a week or £26 a month. The HMRC employment manual detailing this can be found here.

If you wish to claim more than this, you will need to keep records of your expenses. You can’t claim relief on costs such as your rent or mortgage, which would stay the same regardless of where you worked.

For a limited company: You can use this flat rate to claim tax relief on your corporation tax. To claim over and above the flat rate of £6 a day, you will need to show proof and keep detailed records.

Work from home expenses: Self-employed

If you are self-employed, the chances are you work from home quite a lot. In this case, if you fill out a Self-Assessment form there will be several “allowable expenses” that you can offset against your final tax bill.

As well as the expenses that you can claim for as part of running a business (such as insurance, banking, website costs etc), there are some that are specifically for working from home.

These include:

  • Utility bills
  • Broadband
  • Phone bills
  • Office costs (stationery)
  • Council Tax
  • Mortgage or rent

It is important that you only claim for the business portion of these bills. For instance, if 20% of your phone bill is from work related calls, then you could claim tax relief on that portion. If you have six rooms in your home and you use one as a dedicated home office for eight hours a day, you could reasonably claim for that portion of your mortgage payments if you can prove you use this room exclusively for work purposes.

Simplified expenses for working from home

HMRC make it easy for you to claim simplified expenses as a flat rate.

You can use simplified expenses as a sole trader or partnership for your heating and utility bills. The amount you can claim depends on how many hours you work from home.

25 – 50 hours a month: £10/month

50 – 100 hours a month: £18/month

Over 100 hours a month: £26/month

If you want to claim for exact amounts, you will need to calculate the exact proportion of these expenses that are for business use. Use the checker to see which method will save you most money.

Getting your work from home expenses right

As you can see, there are quite a few things you can offset against your tax bill when you work from home.

Make sure you speak with your employer about your work from home costs if you think you are entitled to claim.

If you are self-employed, make sure you keep records of all your bills and costs so that you can verify your claims. It helps to keep things simple when it comes to filling out your Self-Assessment.

Don’t forget, if you subscribe to a magazine to help you with working from home, this could be tax deductible too!

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About the author

Louise is an award-winning journalist and speaker who focuses on working from home, remote work and wellbeing. She is the founder of  The Homeworker, which is dedicated to helping you thrive when you work from home. The Homeworker publishes articles that are designed to keep you healthy, happy, fulfilled, and more productive in work and life.

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