Working from home has become a normal part of life for many self‑employed individuals. But with that shift comes an important question: what tax relief can you legitimately claim for using your home as your workplace?



This guide breaks down the rules in clear English—what you can claim, what you shouldn’t, and how to avoid unexpected Capital Gains Tax issues later on. As always, this is information only, not advice. Tax rules change, and your circumstances matter, so professional guidance is essential.

What Tax Relief Is Available?

Self‑employed individuals can claim a portion of household running costs when working from home. HMRC allows two approaches:

• Actual costs
• Simplified flat‑rate expenses

Employees, however, face different rules—more on that shortly.

Actual Costs: Claiming a Proportion of Your Bills

This method lets you claim a share of your real household expenses, such as:

• Heating and electricity
• Council tax
• Broadband
• Home insurance
• Water (only if metered)

To calculate the business proportion, HMRC expects a reasonable and consistent method. Two common approaches are:

Rooms Method

Divide total costs by the number of rooms, then multiply by the number used for work.

Time Method

(Rooms used for business/Total rooms)×(Hours worked per week/168)

You must keep:

• Bills
• Calculation logs
• Evidence of hours worked

HMRC may ask for this if they query your return.

Simplified Expenses: Flat Monthly Rates

If you work 25+ hours per month from home, you can use HMRC’s flat‑rate system—no receipts required.

 Hours worked per month

 Flat rate

   25–50 -  £10

   51–100 -  £18

   101+ -  £26

Important: Telephone and internet are not included. You can claim these separately based on business use.

Explore more: Flat‑rate vs actual costs

Employees: WFH Claims Ending in 2026

From 6 April 2026 to 5 April 2027, employees cannot claim tax relief from HMRC for working‑from‑home expenses.

• If WFH is voluntary, employers may reimburse costs—but employees cannot claim tax relief themselves.
• If WFH is mandatory, employers can reimburse costs, and employees can claim only if the employer does not reimburse.

Self‑employed individuals remain unaffected.

Will Claiming WFH Expenses Affect Your PPR?

Your Principal Private Residence (PPR) relief protects your home from Capital Gains Tax when you sell it. But certain WFH arrangements can put that at risk.

Mixed Use = Safe

If a room is used for both business and personal purposes, PPR remains intact. Examples:

• A study that doubles as a guest room
• Working from the dining table

Exclusive Use = Risk

If a room is used only for business—never personal use—it may lose PPR protection.

Examples:

• A converted garage used solely as an office
• A dedicated office room with no personal use

This could create a Capital Gains Tax liability when you sell your home.

Learn more: PPR and exclusive use rules

Best Practice

Use a shared‑purpose room for work. This keeps your entire home fully exempt from CGT.

Charging Rent to Your Business: Proceed With Caution

Some business owners consider charging rent to their company for use of their home. HMRC’s guidance is detailed and nuanced.

Key factors affecting what’s “reasonable” include:

• Size of the workspace
• Hours worked
• Power usage
• Exclusive vs mixed use
• Number of people living in the property

If you charge rent and the room is used exclusively for business, you may reduce your PPR exemption.

Explore more:

• HMRC BIM47800
• HMRC examples BIM47825

Summary: What Should You Do?

Working from home can offer valuable tax relief, but the rules are detailed and the consequences—especially around Capital Gains Tax—can be significant.

If you’re unsure whether to use actual costs, simplified expenses, or how to structure your home working arrangements, it’s worth getting tailored advice.

Disclaimer

Tax rules change. While every effort has been made to ensure accuracy, My Controller cannot accept responsibility for any loss arising from reliance on this information. Always seek professional advice before taking action.

If you’d like personalised guidance, get in touch—My Controller offers a free consultation.