How to claim the home as office allowance

If you’re self-employed and work from home, you may be eligible to claim the home as office allowance to reduce your expenses. This guide explains how it works, the rates, and when it’s worth claiming.

How to Claim the Home as Office Allowance

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 as office allowance

How much is the home as office allowance?

It all depends on how often you work from home.

What counts as working from home?

You can claim the home as office allowance for activities such as:

• 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).

When should you 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.