If you run your business from the kitchen table, HMRC owes you something for it. There are two ways to claim, and which one wins depends on your bills.

The flat rate way: simplified expenses

Work from home 25 hours or more in a month and you can claim a flat amount for that month. No apportioning of utility bills, no measuring your spare room.

Hours of business use per month	Flat rate per month
25 to 50	£10
51 to 100	£18
101 and more	£26

GOV.UK’s own example: you work 40 hours at home for ten months and 60 hours in two busy months. That is 10 x £10 plus 2 x £18, a claim of £136 for the year.

Honest assessment: £26 a month is £312 a year. For most people this is the easy option, not the generous one. It exists to save you paperwork, not to make you rich.

One thing to know: the flat rate does not cover phone or internet. You claim the business proportion of those bills on top, from the actual costs.

The actual costs way

Instead of the flat rate, you work out the business share of what you really spend: heat, electricity, council tax, rent or mortgage interest, and so on, apportioned by the rooms you use and the time you use them for business.

Say your home has five rooms, you use one as an office, and your relevant household costs are £6,000 a year. One room’s share is £1,200. Use that room for business half the time and your claim is £600. More than double the flat rate for someone at it full time, but you need the bills and the workings behind every number, because HMRC can ask to see them.

GOV.UK has a simplified expenses checker that runs both calculations side by side. Use it once, then stick with the winner.

Which should you pick

Under 25 hours a month from home, the flat rate is not available at all, so actual costs are your only route. Above that, if you rent cheaply and your bills are modest, take the flat rate and the easy life. If you have a dedicated office and serious heating costs, do the actual sums.

You can switch between methods year by year. They are both claimed as allowable expenses on your Self Assessment return, which means they reduce your taxable profit, not your tax bill pound for pound. A £600 claim saves a basic rate taxpayer £120 in tax plus about £36 in Class 4 National Insurance.

Sources

All pages checked 20 October 2026.

• Simplified expenses: working from home: https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
• Simplified expenses overview: https://www.gov.uk/simpler-income-tax-simplified-expenses
• Expenses if you’re self-employed: https://www.gov.uk/expenses-if-youre-self-employed

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