What expenses can I claim for working at home?

Whether you are an employee, self-employed or an employer, understanding your expenses claims is important. What you need to know about expenses claims for the cost of working at home needs careful consideration.

Thanks to Covid-19, many UK businesses have adapted to working at home and will continue with home working for the foreseeable future. The main question that we have been frequently asked during the pandemic is ‘What expenses can I claim for working at home?’ It can seem like a complicated minefield of percentage calculations!

A good accountant will help you make the right calculations based on your circumstances.

To assist you, we have created a guide to expenses for anyone working at home, whether it’s simplified expenses if you work 25 hours or more a month from home or if it’s calculating your allowable expenses using a flat rate based on the hours you work from home each month.

All home workers

You may be able to calculate your expenses claims based on something called a flat rate if you work more than 25 hours a month at home. A flat rate calculation is for the utility bills in relation to hours spent working at home. The table below shows you how much you may claim each month to cover your fixed costs:

Hours of business use per month

  • 25 to 50
  • 51 to 100
  • 101 and more

Flat rate per month

  • £10
  • £18
  • £26

    You can also claim for a proportion of:

    • Telephone bills
    • Mobile bills
    • Broadband bills

    In addition, you can claim for the total costs for purchases solely for work use:

    • Home equipment
    • Work Stationery
    • Home office furniture

    The HMRC simplified expenses checker will calculate what you can claim by working out the actual costs.

    Running a business at home

    Maybe you are actually running a business from home so you need to understand about

    • allowable expenses
    • what is excluded from expenses
    • and about your need for additional costs such as insurance.

    If you are running a business from home you may have to pay business rates on the part of your property that you use for your business. If that is the case you may qualify for small business rates relief if your property has a rateable value of £12,000 or less.

    Employer’s of staff working at home – What do you have to pay your staff?

    To be eligible to make a claim, staff must be regularly performing some or all of their duties at home. This includes a regular pattern of home and workplace working as long as it is regular.

    Informal or occasional working at home does not count and the costs must be reasonable additional costs.

    Option 1

    You can used a fixed payment model, which saves time and additional record keeping.

    You pay a set fee of £6 per week to employees paid weekly or £26 per month to employees paid monthly.

    Option 2

    You can pay actual additional costs as they occur, but you only pay for the increase eg

    • Additional heating and lighting
    • Additional home insurance costs
    • Water
    • Telephone and broadband*
    • If applicable – business rates**

    *Costs that stay the same are not permitted eg mortgage payments or existing broadband connection fees.
    **Please seek professional advice appropriately before paying

    In part two we consider the tax relief elements of working at home for staff claims including purchases of work equipment. Click to read ‘How much tax relief can I claim for purchases for staff?’

    If any of the above has made you pause for thought, we’re here if you need further advice. Want to have a chat? Give us a call!