HMRC Compliance Tool
Working From Home
Allowance Calculator
Calculate your allowable home office deduction accurately and compliantly.
Your Details
Enter your tax situation so we can calculate the most beneficial allowance for you.
Calculation Method
Choose the method that best suits your situation. You can switch methods each tax year.
| Hours/month | Monthly rate | Annual total |
|---|---|---|
| Under 25 hours | Not eligible | — |
| 25 – 50 hours | £10/month | £120/year |
| 51 – 100 hours | £18/month | £216/year |
| 101+ hours | £26/month | £312/year |
Step 1 — Apportionment basis
How HMRC apportionment works
Fixed costs (energy, rent, council tax, insurance) are split first by rooms used for business ÷ total rooms, then by hours worked at home ÷ total hours at home. Variable items such as broadband are apportioned by actual business usage instead. Items used wholly and exclusively for business are claimed at 100%.
Step 2 — Energy
Electricity and gas are apportioned using your combined room × time percentage. Keep annual energy statements as evidence.
Step 3 — Property costs
Rent is apportioned using your combined room × time percentage. Keep your tenancy agreement and bank statements as evidence.
You own your home outright — there is no rent or mortgage interest to claim. You can still claim all other running costs below.
Step 4 — Council tax
Step 5 — Insurance
Both are apportioned by your combined room × time percentage. If you use a room partly for business, inform your insurer — some policies exclude business activity without an endorsement.
Step 6 — Broadband, telephone & internet
Step 7 — Water
Step 8 — Cleaning & maintenance
General repairs and cleaning are apportioned. Work done specifically and exclusively to the business room is claimable in full.
Step 9 — Other wholly business costs
All items in this section are claimed at 100% as wholly business costs. Only include items with no personal element whatsoever.
Annual Allowable Deduction
This reduces your taxable profit.
What to Include in Your Self Assessment
Company Director – Working From Home
As a director, you and your company are separate legal entities. There are two main approaches to reclaiming home office costs through the company.
Step 1 — Apportionment basis
How the rental agreement apportionment works
You (as the property owner) charge your company a licence fee for use of your home office. The fee is calculated by apportioning household costs: first by business rooms ÷ total rooms, then by hours worked ÷ total hours at home. The company pays you this amount, deducts it as an expense, and you declare it as rental income on your Self Assessment — but can offset household costs against it.
Step 2 — Energy
Electricity and gas are apportioned by your combined room × time percentage. Keep annual energy statements as evidence for the rental agreement.
Step 3 — Property costs
Rent is apportioned using your combined room × time percentage. You declare the rental income received from your company on your Self Assessment and offset the apportioned rent against it.
You own your home outright — there is no rent or mortgage interest to include. You can still include all other running costs in the rental agreement below.
Step 4 — Council tax
Step 5 — Insurance
Both are apportioned by your combined room × time percentage. Inform your insurer if you use a room partly for business — some policies require a commercial endorsement.
Step 6 — Broadband, telephone & internet
Step 7 — Water
Step 8 — Cleaning & maintenance
General repairs and cleaning are apportioned. Work done specifically and exclusively to the business room is included at 100% in the rental agreement fee.
Annual Company Deduction
Reduces your company's Corporation Tax liability.
How to Claim
Employee — 2025/26 (Final Year)
Employees can still claim for the 2025/26 tax year — the last year this relief is available directly from HMRC. From 6 April 2026 this route closes.
Annual Tax Relief Claim
Deduction from taxable earnings
How to Claim (2025/26 Tax Year)
Who Can Claim?
- Self-employed / sole traders — full flexibility. Simplified flat rate or actual costs. Can claim mortgage interest, rent, council tax, and insurance in proportion.
- Limited company directors — £6/week flat rate through the company, or a formal rental/licence agreement for higher amounts.
- Employees (2025/26 only) — £6/week if required to work from home by employer. Closes 5 April 2026.
- Employees from 6 April 2026 — direct HMRC claims no longer available. Only employer reimbursements will qualify.
HMRC Flat Rates (2025/26)
£120/year. No receipts.
£216/year. No receipts.
£312/year. No receipts.
£312/year. Unchanged since 2020.