Can I claim expenses for working from home?

Working from home has become a normal part of life for many people, yet the rules on claiming expenses are still widely misunderstood. I regularly hear people assume they can claim back a portion of their rent, council tax or broadband simply because they log in from the living room. In my opinion the UK rules are generous in some situations and very restrictive in others, so it is essential to understand what HMRC actually allows before making a claim.

This guide explains when you can claim expenses for working from home, who qualifies, what you can realistically claim, how the rules differ for employees and the self employed, and how HMRC expects you to calculate your claim. The goal is to give you a clear and practical understanding of what is allowed so you do not miss out on legitimate relief or accidentally claim something that HMRC could challenge.

Working from home as an employee

If you are an employee rather than self employed the rules are far stricter. You can only claim expenses when your employer requires you to work from home. This is a key distinction. Choosing to work from home, even with your employer’s agreement or encouragement, does not qualify. HMRC’s test is simple. Were you required to work from home because it was essential for your role, or was it simply convenient for you or the business.

During the pandemic these rules were relaxed and employees could claim tax relief even if they worked from home informally. That relaxation has ended, and the pre pandemic rules are now fully in force. If your employer provides you with an office but you decide to stay home for comfort, childcare or travel cost savings, you cannot claim tax relief. If you work from home because the employer has no workspace for you, or your role genuinely cannot be carried out anywhere else, then a claim becomes possible.

In most cases the simplest way to claim as an employee is by using the flat rate allowance. HMRC allows a small weekly amount that does not require detailed evidence. Although the amount is modest, it is often the only realistic option. Claiming a proportion of household bills can only be done in rare cases where you are required to work from home full time and where you can show additional costs that arise purely because of work. HMRC does not allow claims for costs you would pay anyway, which is why rent, council tax and mortgage payments are never allowable for employees.

In my opinion the biggest mistake employees make is assuming that home working automatically means they can claim. The law is focused on necessity rather than choice, and HMRC applies that rule very strictly.

Working from home when self employed

The situation is very different if you are self employed because HMRC allows you to claim expenses for the part of your home that is used for business. This includes heating, electricity, broadband, cleaning and mortgage interest, along with a reasonable proportion of rent if you rent your home. The rules are still based on fairness and accuracy, but they give you far more scope to claim realistic business costs.

The key principle is that you can only claim the business portion of your household expenses. If you use a room exclusively for work you can allocate costs on a reasonable basis, often by dividing your home into equal parts and then adjusting the claim by the number of hours used for work. If your kitchen table doubles as a workspace you can still claim, but HMRC expects your calculation to reflect the fact the room is also used personally. The claim will therefore be smaller but still legitimate.

Some people prefer to use HMRC’s simplified home working rates. These are fixed monthly amounts based on the number of hours you work from home and require far less record keeping. They are helpful for small businesses and new sole traders who want an uncomplicated approach. In my experience simplified expenses are convenient but not always the most tax efficient option, particularly for those who work full time from home or who have a dedicated workspace.

One point that often surprises people is that claiming part of your home as an exclusive office can have Capital Gains Tax implications when you sell your property. If a room is used exclusively for business, that portion may not qualify for full private residence relief. Many people therefore choose to keep at least some personal use in the room to avoid this outcome. In my opinion this is a subtle but important area of planning for self employed individuals.

What HMRC considers a reasonable claim

Regardless of whether you are an employee or self employed, HMRC expects your claim to reflect your actual business use. For employees this usually means the flat rate. For self employed people it means using a proportionate method that makes sense for your home and your work patterns. You do not need to overcomplicate things. HMRC is more concerned about claims that look inflated than claims that are carefully estimated.

The best approach is to keep basic records. For example, your utility bills, broadband costs and rent or mortgage interest statements. If you work in one room, note the floor space or the number of rooms in your property and apply a fair business percentage. If you work set hours each week, reflect that in your calculation. The important thing is to be consistent and honest about how your home is used.

In my view the strongest claims are the ones that you can explain easily. If your working from home expenses would make sense to someone outside your business, HMRC is unlikely to challenge them.

How to claim your working from home expenses

The method depends on your employment status. Employees claim through a tax relief form or their personal tax account, and the relief adjusts their tax code or produces a refund. Self employed people claim through their Self Assessment tax return as part of their business expenses. If you use a simplified calculation, you state the flat rate. If you use the full method, you enter your share of the actual costs.

You do not need to send receipts unless HMRC asks for them, but you must keep records in case evidence is required later. In practice HMRC rarely asks for proof unless the claim looks unusually high or your tax return raises other questions.

Final thoughts

You can only claim working from home expenses if the rules genuinely apply to your situation. Employees are restricted to limited relief unless home working is compulsory for their role. Self employed people can claim a much broader range of costs, provided the method is fair, reasonable and based on genuine business use. In my opinion the best approach is to keep claims simple, follow HMRC’s guidance and avoid the temptation to claim more than your working pattern supports.

Working from home does create additional costs, and with the correct method you can recover some of them without difficulty. The key is understanding the boundaries so that your claim is both tax efficient and compliant.