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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:

  • either by calculating your rent, mortgage, and bills, then figuring out what proportion of your home you use for business
  • or simply by using a flat rate – this is called the home office allowance.

How much is it?

It all depends on how often you work from home.

Hours of business use per monthFlat rate that you can claim
25 – 50 hours£10 per month
51 – 100 hours£18 per month
More than 101 hours£26 per month

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)
  • or if 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:

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.

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