What Expenses Can I Claim For Working From Home As Self-Employed?

Working from home means saving money. When self-employed, there are many remote working-related business expenses that you can claim, including a proportion of:

• Gas, electricity and water bills
• Internet and telephone bills
• Rent and mortgage interest costs
• Council tax

These costs can be used to lower your tax bill and therefore save money for the future of your business. Here, we cover some of the expenses that you can and can’t claim if you’re self-employed, as well as how to calculate your working-from-home tax expenses.

Can I claim expenses when working from home as self-employed?

Yes! Although working from home may save you money on transportation, pricey meal deals and a takeaway cup of coffee, running a self-employed business can still be expensive.

As luck would have it, you can actually deduct some of these running costs as allowable business expenses when working out your taxable profit for that tax year.

Let’s explore what’s considered ‘allowable’…

What expenses can I claim working from home?

Utilities

One of the main disadvantages of working from home is just how expensive your utility bills can be, especially during the winter months. You can generally expect to be charged more for increased use of gas, electricity and water, and possibly even your telephone and internet. But worry not – you can actually claim for a percentage of these.

Rent and mortgage expenses

In addition to your utility bills, you can also claim a proportion of your costs for rent, and mortgage interest if you own your home. You can even claim a portion of your council tax. With this in mind, you may have to pay Capital Gains Tax if you use the room solely for business purposes and sell your property in the future.

What expenses can’t I claim working from home?

Of course, you can’t claim costs for everything when working from home – that would simply be greedy. So, what can’t you claim for working remotely?

As to be expected, you can only claim for the things associated with your business, including lighting and electricity for your office space, business phone calls and business-related internet expenses. It’s not possible to claim personal expenses for things that you use privately.

How do I calculate my working-from-home tax expenses?

The amount you can claim for utility bills can be calculated using the number of rooms in your home. If you have four rooms in your home – one of which you use solely as an office – and your electricity bill is £400 per year, for example, you could claim up to £100 (400 divided by 4).

You can also avoid these complex calculations by using simplified expenses. This varies depending on the number of hours you work from home each month:

• 25 to 50 hours a month – £10 per month
• 51 to 100 hours a month – £18 per month
• 101 hours a month or more – £26 per month

We understand how challenging it has been to run a small business as a sole trader during the pandemic. That’s why we’re here to help. Check out our handy Work From Home Calculator, where you can work out how much you could potentially save. 

With GoSimpleTax, you don’t have to be an expert to complete your annual tax return. Instead, we simplify matters so that you can spend more time focusing on your self-employed business and less time worrying about taxes.

With our free trial you can add your income and expense entries as well. That means you can then view how much tax you’ll owe completely free. We’ll even alert you when we think there’s a potential tax saving you might be missing out on. When you want to make more entries, or file or see a copy of your tax return, simply upgrade your account.

What’s stopping you? Sign up for GoSimpleTax today.

Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.