“Can I claim home office expenses?” is one of the most common questions we get, and the honest answer is: it depends on your employment status. The rules for a self-employed sole trader are completely different from those for a limited company director, which are different again from those that apply to an employee. Treating them as interchangeable is where most people go wrong.

There’s also a significant change to be aware of right now. From 6 April 2026, the flat-rate tax relief that employees could claim for working from home is no longer available for the current tax year (2026/27). If you’re an employee who’s been claiming that relief, it’s gone for now — though you can still make backdated claims for the four previous tax years. Sole traders and directors are unaffected by this particular change.

Below, we break down the rules for each group in plain terms.

If you’re self-employed and run your business from home, you can claim a proportion of your household costs as a business expense against your self-assessment tax return. The question is how you calculate that proportion.

The simplest method is HMRC’s simplified expenses flat rate. This sidesteps the need for any calculation and lets you deduct a fixed amount based on how many hours per month you work from home:

• 25–50 hours: £10 per month
• 51–100 hours: £18 per month
• More than 100 hours: £26 per month

For a lot of sole traders, especially those who work from home occasionally rather than full-time, the flat rate is clean and defensible. No receipts, no apportionment calculation, no fuss.

The alternative is to apportion your actual household costs — dividing them by the number of rooms in your home and the proportion of time a room is used for business. So if you use one room out of eight for business purposes for, say, half the week, you’d claim one-eighth of your variable costs (heating, electricity, water) multiplied by the time fraction. You can’t include fixed costs like rent in this calculation in the same straightforward way, and council tax sits in a grey area depending on your circumstances.

One thing worth flagging: if you designate a room as exclusively for business use, you may create a capital gains tax exposure when you sell your home, because part of your property could lose its Private Residence Relief. We’d always suggest keeping rooms dual-purpose where possible — a desk in the spare bedroom is fine; a room you’ve formally converted and never use for anything personal is more complicated.

If you operate through a limited company and work from home, your company can reimburse you for home working costs — but the mechanics are different from sole trader expenses, because the costs belong to you personally, not directly to the company.

HMRC’s flat-rate allowance lets the company pay you £6 per week (£312 per year) without any receipts or supporting calculations. The payment is free of income tax and National Insurance, and the company gets a deduction. For many directors who work from home only part of the time, this is the right answer: straightforward to administer and perfectly adequate as a contribution.

If your actual home working costs are higher and you want to claim more, you’d use an actual cost method. This involves apportioning your household bills based on the proportion of your home used for business and the amount of time it’s used in that way. Variable costs — heating, electricity, broadband where there’s a clear business element — can be included. Fixed costs like mortgage interest and rent are excluded from the calculation under this method.

The same capital gains tax consideration applies here as for sole traders. If part of your home is treated as exclusively used for business by a company, HMRC may argue that Private Residence Relief is partly restricted on a future sale. Keeping spaces as mixed-use is the sensible approach for most directors.

Bear in mind that any reimbursement above the flat rate needs to be properly documented, with a written agreement between you and the company. It’s not complicated, but it needs to be done correctly to avoid HMRC treating the payment as additional salary.

Until 5 April 2026, employees who were required to work from home (rather than choosing to) could claim tax relief on either £6 per week or their actual additional household costs. At a 20% basic rate, the £6/week flat rate translated to £1.20 per week, or around £62 per year — not a life-changing sum, but worth claiming.

From 6 April 2026, that relief is no longer available for the current tax year. HMRC has not yet confirmed what the position will be from April 2027 onwards, and new arrangements are being introduced around employer reimbursement, but the simple employee claim that many people had grown used to making through their P87 or self-assessment return is gone for 2026/27.

If you’re an employee and you made backdated claims for previous years, those are still valid. You can go back four tax years — so claims for 2022/23, 2023/24, 2024/25, and 2025/26 are still open if you haven’t already made them. The eligibility test for those years still requires that you were required to work from home, not that you simply chose to or that your employer’s office was occasionally full.

The distinction matters. An employment contract that lets you work from home, or a hybrid arrangement where you have the option to go in, does not meet the ‘required’ test — even if you work from home most of the time. HMRC’s position on this has been consistent for years.

Whether you’re a sole trader, director, or employee making a backdated claim, the kinds of costs that qualify follow a similar logic. You’re looking for expenses that are genuinely additional — costs you incur because you work from home that you wouldn’t incur otherwise.

Variable costs that can be apportioned include heating and electricity, and business phone calls where they exceed your normal personal usage. Internet costs are trickier: HMRC accepts a business element where broadband is used for work purposes, but the full cost isn’t claimable because you’d have broadband anyway. The additional element — if any — is what’s allowable.

Fixed costs are generally excluded from the calculation. Rent, mortgage payments, and council tax don’t change because you’re working from home, so they don’t meet HMRC’s definition of an additional cost. Some practitioners will apportion council tax for sole traders where there’s a clear business use argument, but this is an area where the position is less clear-cut.

The practical upshot is that for most people, especially those working from a home office for part of the week, the flat-rate methods — simplified expenses for sole traders, or the £6/week reimbursement for directors — produce a reasonable result with minimal admin. The actual cost method is worth pursuing if your home working costs are genuinely high, but it requires more record-keeping and, in our view, is worth reviewing with an accountant before you commit to it.