Can You Claim Home Office Expenses?
Yes — if you work from home as a freelancer or sole trader, you can claim a proportion of your household running costs as a business expense, reducing your taxable profit.
Method 1: Flat Rate (Simplified Expenses)
HMRC offers a simplified flat rate based on hours worked from home per month:
- 25-50 hours/month — £10/month
- 51-100 hours/month — £18/month
- 101+ hours/month — £26/month
This is the simplest method — no receipts needed, just a record of your hours.
Method 2: Actual Costs (Proportion of Household Bills)
Calculate the business proportion of your actual costs:
- Count the number of rooms in your home
- Determine what fraction of your time each room is used for business
- Apply this fraction to your eligible bills: rent/mortgage interest, utilities, broadband, council tax
Example: 5-room house, 1 office room used 8 hours/day = 1/5 × 8/24 = 6.67% of eligible bills
What You Can and Cannot Claim
You can claim: rent (proportion), mortgage interest (proportion), utilities, broadband, home insurance (proportion), council tax (proportion)
You cannot claim: the capital element of mortgage payments, personal telephone calls, TV licence (unless for business news monitoring)
Dedicated Business Premises
If you have a room used exclusively for business (a true home office, not your kitchen table), you can claim a higher proportion — but be aware this may affect Capital Gains Tax when you sell your home.
Keep Good Records
HMRC may ask to see evidence of your home office expenses. Keep utility bills, broadband invoices, and a record of your working hours. invly helps you keep your business income organised — pair it with a simple expense spreadsheet for a complete picture of your finances.