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.
|Hours of business use per month||Flat 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.
- 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:
If you’re self-employed and use your car for work, you can claim back a flat rate for your usage costs using the Mileage Allowance. If you’re employed, claim the mileage tax relief instead.
Can I claim anything else if I use it?
For these, just work out the percentage of time that you use them for your self-employed business.
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