Whether you can claim home office expenses is one of the most common questions we hear, and it is also one of the most misunderstood. A lot of people assume that working from home automatically means they can claim something back from HMRC. Sometimes that is true. Sometimes it is not. And the rules are different depending on whether you are a sole trader, a limited company director, or an employee.

There have also been changes worth knowing about. From April 2026, employees can no longer claim the flat-rate working-from-home relief that many people used during and after the pandemic. But that restriction does not apply to the self-employed or to limited companies. If you run your own business, claiming a proportion of your home costs is still very much on the table.

This post sets out who can claim, how much, and what HMRC expects to see. We will focus on the situations we deal with most often: sole traders using Self Assessment, and directors running things through a limited company.

Until recently, employees who were required to work from home could claim tax relief of £6 a week without needing to provide receipts. That relief is no longer available for the 2026 to 2027 tax year (6 April 2026 onwards). HMRC has removed the flat-rate relief for employees, which means that if you are employed and working from home, you cannot currently claim it through the PAYE system or the Government Gateway online service.

There is still some good news for employees. You can backdate a claim for up to four previous tax years, so if you were required to work from home before April 2026 and have not yet claimed, it may be worth doing so. The relief was based on the rate at which you paid income tax: a basic-rate taxpayer claiming £6 a week would have received around £1.20 a week back, which is modest but real money over a full year.

It is also worth noting the eligibility rule that has always applied. You can only claim if you were required to work from home, not because you chose to. If your employer has an office you could use but you prefer working from home, that does not qualify. HMRC has always been clear on this point, and it has not changed.

If you are employed and have questions about whether your specific situation qualifies for a backdated claim, a Self Assessment tax return is the right route if you complete one already.

If you are self-employed, the rules are more generous and they remain unchanged. You can claim a proportion of your household running costs as a business expense, reducing the profit on which you pay tax. This is often called the use of home as office claim.

There are two methods to choose from.

The flat-rate method (simplified expenses)

HMRC allows self-employed people to use a flat rate based on the number of hours worked from home each month. The rates are: £10 a month for 25 to 50 hours, £18 a month for 51 to 100 hours, and £26 a month for over 100 hours. It is straightforward and requires minimal record-keeping, which is why a lot of sole traders use it.

The actual cost method

Alternatively, you can work out the actual proportion of your home costs attributable to business use. This means looking at costs such as heating, electricity, broadband, and rent or mortgage interest, and calculating what fraction relates to the room or rooms you use for work, based on the number of rooms and the hours used. This approach can produce a larger deduction, but it requires more detailed records and a reasonable calculation you can defend if HMRC ever asks.

In our experience, most sole traders with a home office benefit from at least some claim here. If you are not claiming anything, it is worth revisiting when you next complete your return.

If you run a limited company and work from home, there is a specific route available that sits separately from the employee relief rules. The company can pay you a use of home allowance, which it treats as a legitimate business expense. This reduces the company’s taxable profit, which means less corporation tax to pay.

HMRC accepts a flat rate of £6 a week (£312 a year) without requiring detailed calculations or receipts. That is the same figure that employees used to claim, but here it is the company paying it to you rather than you claiming relief on tax already paid. You do not pay income tax on the payment, and the company gets a deduction. Done correctly, it is a clean and compliant arrangement.

If your actual costs are higher, it is possible to put a larger amount through, but you would need a proper calculation to support it. The calculation typically looks at the number of rooms in the property, the proportion used for business, and the relevant running costs. If you are doing this, it is worth getting it right, because an inflated or poorly documented claim is one of the things that can attract HMRC attention.

The other option available to directors is to charge the company rent for use of office space. This has a different tax treatment and different implications for you personally, so it is worth taking proper advice before going down that route.

A few misconceptions come up regularly, and it is worth being direct about them.

You cannot claim your entire mortgage payment or rent as a business expense. Even with the actual cost method, you are only claiming the business-use proportion of running costs, and only costs that relate to the use of the space, such as heat, light, and broadband. The capital element of a mortgage is not a business expense.

You also cannot claim for a room that you use for both personal and business purposes on the basis that it is “mainly” for work. HMRC expects a genuine calculation based on time and space, not an informal estimate.

For limited company directors, mixing personal and business costs through the company is something HMRC looks at closely. If you claim costs that are not wholly and exclusively for business purposes, those amounts could be treated as a benefit in kind, which creates a tax charge for you personally and a reporting obligation for the company.

Finally, if you complete a Self Assessment tax return, any claim for home working costs must go through the return itself. You cannot use the separate HMRC online service to claim at the same time, and using both would result in a duplicate claim, which would need to be corrected.