Working from home costs something: heating, lighting, a share of the electricity that runs the laptop. HMRC accepts that and gives sole traders two ways to claim it.
The flat rates
| Hours worked from home in the month | Flat rate you can claim |
|---|---|
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 or more | £26 |
Under 25 hours in a month, nothing for that month. The rates are the same for 2025/26 and 2026/27.
The flat rate covers the household running costs of working from home: heat, light and power. Business phone and internet costs are claimed separately, as their business share.
A worked example
A year of mixed hours
| Months | Hours a month | Rate | Claim | |
|---|---|---|---|---|
| Quiet months | 8 | about 40 | £10 | £80 |
| Busy months | 4 | about 110 | £26 | £104 |
| Year | 12 | £184 |
Working 60 hours a month all year would be 12 × £18 = £216. Not a fortune, but it needs no receipts, and it’s an allowable expense against both income tax and Class 4 National Insurance.
When actual costs are better
The alternative is to claim a share of your real household bills, rent, mortgage interest, council tax, insurance, heat and light, worked out by the number of rooms you use and the hours you use them. For someone running a workshop from a converted garage, or working long hours in a dedicated room, actual costs can be several times the flat rate. It needs the bills and a reasonable, written-down method, and if a room is used only for the business it can affect the capital gains tax exemption on your home when you sell, so most people keep some private use of the room.
Unlike vehicles, you can choose the method each year, so it’s worth doing the sum once.
Where it goes on the return
Box 21 of the full self-employment pages, rent, rates, power and insurance costs, whichever method you use. SA103 explained lists the other boxes.
What the spreadsheet does
The Home Office tab of the Sole Trader Bookkeeping spreadsheet takes either your hours per month, applying the right band automatically, or your actual costs and business share. The result joins the other expenses in the Tax Estimate and lands in box 21 on the SA103 Summary.
Questions people ask
What counts as hours working from home?
Time you spend working on the business at home: making, admin, invoicing, calls. Count the hours for each month, because the rate is set month by month and can change through the year.
Can I claim phone and broadband on top?
Yes. The flat rate covers household running costs such as heat, light and power. The business share of your phone and internet is a separate expense, claimed in box 23.
Can I claim if I work from home less than 25 hours a month?
Not the flat rate. You can still claim a reasonable share of actual costs based on the space and time you use, but for a few hours a month the amounts are usually too small to be worth the working out.
Is it the same for limited company directors?
No. This flat rate is for the self-employed. A director is an employee of the company, and the company can pay a separate allowance under different rules; the director calculator covers company pay, not this claim.
Sources
- gov.uk: Simplified expenses if you're self-employed, working from home.
- gov.uk: Expenses if you're self-employed, office, property and equipment.
This is general information, not tax advice. Figures are as published on gov.uk on the date shown and can change. Check them, or ask an accountant, before you rely on them.