The home office allowance: how to claim if you work from home

If you’re self-employed, there are two ways through which you can claim your home as an expense:

• Calculate your rent, mortgage, and bills, then figuring out what proportion of your home you use for business
• Use a flat rate – this is called the home office allowance

How much is it?

It all depends on how often you work from home.

What counts as working from home?

• Any work you do for your clients or contractor
• Doing your taxes (including chatting with TaxScouts‘ customer support)
• Sorting out your receipts and invoices
• Basically everything that’s work-related

What HMRC actually cares is that your “business use” is reasonable. In most cases that means that it should be in line with what you earn from self-employment.

For example:

• if you’re a freelance software engineer, you spend your time writing code from home, and earn the equivalent of a full-time wage, then you can claim about 40 hours
• but if you’re an Uber driver who spends most of the time on the road, you’re probably limited to the minimum of 25 (or even less).

Should I claim it?

It doesn’t make sense to claim the home office allowance if:

• You don’t work from home often (or can’t justify to)
• You’re paying a high rent or mortgage (especially if it’s for a one-bedroom: the number of rooms matters when you calculate the percentage of time you’re using your home for business)
• You are claiming a better allowance, like the £1,000 trading allowance

HMRC has also built this tool that can help you check if using simplified expenses is right for you.

Example of simplified expenses:

• the home office allowance
• the mileage allowance

Can I claim anything else if I use it?

Yes:

• telephone
• internet bills

For these, just work out the percentage of time that you use them for your self-employed business.