Working from Home Tax Relief for Self-Employed UK 2025/26: What You Can Claim
If you're self-employed and work from home — even part of the time — you can claim tax relief on a portion of your household costs. Most freelancers either don't know this or claim far less than they're entitled to. Here's exactly how it works.
Two Methods: Simplified vs Actual Costs
HMRC gives you two options for claiming working-from-home expenses. You pick one per tax year — you can't mix them.
Option 1: Simplified Expenses (Flat Rate)
The easiest method. No receipts needed for home costs — just track your hours:
| Hours worked from home per month | Monthly flat rate |
|---|---|
| 25–50 hours | £10 |
| 51–100 hours | £18 |
| 101+ hours | £26 |
If you work full-time from home (say 160 hours/month), that's £26 × 12 = £312/year you can deduct from your taxable profits. Not life-changing, but it's free money for zero paperwork.
Option 2: Actual Costs (Proportion Method)
More work, but usually a bigger deduction. You calculate the business proportion of your actual household costs:
- Mortgage interest (not the capital repayment) or rent
- Council tax
- Gas and electricity
- Water rates
- Home insurance
- Internet and phone (business proportion)
- Repairs and maintenance (to shared areas or your workspace)
To calculate the proportion, HMRC accepts a reasonable method. The most common:
Room-based: If your home has 5 rooms (excluding bathrooms, halls, kitchen) and you use 1 as an office, claim 1/5 (20%) of qualifying costs.
Time-based adjustment: If you only work from that room 8 hours a day, you could argue the business use is 20% × (8/24) = about 6.7%. But most people just use the room fraction — HMRC rarely challenges a dedicated office room at the full room proportion.
Which Method Should You Choose?
Quick rule of thumb:
- Rent/mortgage under £600/month + you work part-time from home → simplified expenses is probably easier and close enough
- Rent/mortgage over £800/month + dedicated office room → actual costs almost certainly gives you a bigger deduction
- You hate paperwork → simplified expenses, always
What Counts as "Working from Home"?
You must work from home regularly. HMRC's definition isn't precise, but generally:
- Working from home 1–2 days a week counts
- Occasionally checking emails on your sofa does not count
- You need a workspace — a room, a desk area, somewhere identifiable as your work space
You don't need a separate room, but having one makes the claim stronger and simpler to calculate.
Capital Gains Warning
If you own your home and claim actual costs, be aware of a potential Capital Gains Tax issue. If part of your home is used exclusively for business, that portion might not qualify for Private Residence Relief when you sell.
The way around this: make sure your office room has some personal use too (a bookshelf, a sofa, anything). If it's partly personal, the CGT issue doesn't arise. This is one reason many accountants recommend simplified expenses for homeowners — it avoids the CGT question entirely.
Other Home-Related Expenses You Can Claim Separately
These are claimable regardless of which method you choose:
- Office furniture — desk, chair, shelving (as capital allowances or outright if under £1,000)
- Computer equipment — laptop, monitor, keyboard, mouse
- Stationery and printing
- Software subscriptions — accounting software, design tools, etc.
- Business phone line (if separate from personal)
These are direct business expenses, not "use of home" expenses. Claim them in addition to your flat rate or proportion.
How to Record It
Simplified expenses: Keep a simple log of hours worked from home each month. A spreadsheet is fine. Enter the total on your Self Assessment (or MTD quarterly update) as "use of home".
Actual costs: Keep all household bills. Calculate your business proportion once a year. Keep the calculation on file — HMRC can ask to see it.
Need help tracking all your business expenses? Our Getting-Paid Toolkit includes expense tracking templates alongside invoice and payment tools — everything a UK freelancer needs in one pack.
Common Mistakes
- Claiming both methods — you can't. Pick one per year.
- Not claiming at all — the most common mistake. Even simplified expenses puts money back in your pocket.
- Claiming 100% of bills — unless you literally live in your office and nowhere else, this won't fly.
- Forgetting internet — easily 50–75% business use for most freelancers. Claim it.
Summary
If you work from home, you should be claiming something. Simplified expenses takes 5 minutes a month and saves you up to £312/year in deductions. Actual costs takes more effort but can save significantly more if you have high housing costs.
Either way, it's money you're currently leaving on the table. Stop doing that.