A home office can support your business, but the right expense claim depends on how you work. Sole traders and employees of limited companies do not use the same rules.
The original Advent image highlights the topic. This updated article separates the different routes so a general “£6 a week” tip is not mistaken for a universal allowance.
How can a sole trader calculate homeworking costs?
A self-employed person can consider an appropriate business proportion of eligible actual costs. The calculation should reflect genuine business use rather than treating every household bill as a business expense.
Alternatively, eligible sole traders can use simplified expenses for qualifying hours worked at home: £10 per month for 25–50 hours, £18 for 51–100 hours, and £26 for 101 hours or more. Keep a record of those hours. The flat rate does not include telephone or internet costs, which need a separate business-use calculation.
What about a limited company director?
A director working as an employee should consider the employer homeworking rules, not the sole-trader simplified expenses table. HMRC permits qualifying employers to reimburse regular homeworking costs at £6 a week, or £26 a month for monthly paid employees, without having to justify that amount.
The arrangement still needs to meet the relevant conditions. Larger reimbursements require support for the qualifying additional costs. Ordinary costs that would arise regardless of homeworking are not automatically covered.
What changed for employees in April 2026?
From the 2026/27 tax year, employees can no longer claim personal tax relief for unreimbursed homeworking expenses. This is separate from an employer’s ability to reimburse eligible costs. Older online guidance may describe the former employee claim and should not be applied without checking the tax year.
Make your records easy to explain
- Record whether the claim belongs to a sole trade or company employment.
- Keep relevant bills and a clear calculation.
- Document qualifying homeworking arrangements.
- Separate private spending from business use.
- Check that the same cost has not been claimed twice.
For example, a freelancer using a room for some working hours needs a reasonable basis for allocating costs. A company director arranging reimbursement needs evidence appropriate to the employer rules. The two calculations should not simply be copied from one business structure to the other.
Get the claim right before filing
Digivolve can review your homeworking records and help decide which method is appropriate. See our self-employed tax return support, director tax return service, or book a consultation.
Reviewed 2 October 2026. Sources: sole-trader simplified expenses, employer reimbursements and employee tax relief changes.