Can I claim use of home as office if I am self-employed?

Full answer

If you are a sole trader or in a partnership and you work from home, HMRC allows you to deduct a fair proportion of your home running costs as a business expense. There are two methods. **Method 1: Simplified flat rate (easiest)** HMRC's simplified expenses use the number of hours you work from home each month: - 25-50 hours/month: £10/month (£120/yr). - 51-100 hours/month: £18/month (£216/yr). - 101+ hours/month: £26/month (£312/yr). No receipts required. Just record the hours worked. Claim on the Self Assessment return under 'Use of home'. **Method 2: Actual cost apportionment (potentially higher)** Calculate the business proportion of: - Gas, electricity, water. - Broadband and telephone (business fraction only). - Buildings and contents insurance (business fraction). - Cleaning and maintenance. - Mortgage interest or rent -- only the business-use fraction. Apportionment is usually by room count (number of rooms used for business vs total rooms) or by floor area, and by hours of business use as a fraction of total use of that space. **Capital Gains Tax caution** If you claim a specific room is used exclusively for business, that room may lose its Principal Private Residence relief when you sell the property, creating a CGT exposure. To avoid this, never claim exclusive use -- most HMRC guidance recommends mixed-use wording. The flat-rate method avoids this risk entirely. **What you cannot claim** Mortgage capital repayments (only the interest element is deductible). Improvements to the property. Costs that are entirely private. **PAYE employees (for comparison)** Employees cannot use this method. They claim the £6/week home working allowance via P87 or Self Assessment if their employer mandates home working.

Related guides

• Uk Self Employed Allowable Expenses
• Uk Working From Home Tax Relief

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