Can Sole Traders Claim Working From Home Expenses in the UK?

Most sole traders in the UK can claim working from home expenses — including a portion of household costs like electricity, heating, and internet.

The key is that you can only claim the business-use part of these costs, not the full amount.

Here’s how working from home expenses work for sole traders and what you can claim.

Quick answer

Yes — most sole traders can claim working from home expenses in the UK if they use part of their home for business.

You can either use HMRC’s simplified expenses flat-rate method or claim the actual business portion of household costs, depending on which is more suitable.

HMRC simplified expenses for working from home

Eligible sole traders can choose simplified expenses as an optional way to calculate some working from home costs. The working from home flat rate is based on the number of hours you work from home each month:

This is sometimes called the HMRC working from home allowance. Some sole traders use the flat rate for simplicity, while others calculate the actual business share of their household costs instead. The right method depends on your circumstances, so this is general information rather than personalised tax advice.

Pros of simplified expenses

• Easy to use
• Less admin
• No detailed bill splitting
• Good for beginners

Cons of simplified expenses

• May result in a smaller claim
• Not ideal for heavy home use
• Still requires tracking hours

The HMRC rule: “wholly and exclusively”

HMRC allows sole traders to deduct expenses that are incurred wholly and exclusively for business purposes.

When you work from home, many costs are mixed-use. Your electricity, heating, broadband, and housing costs usually support both your business and your personal life.

That means you cannot usually claim the full bill. Instead, you can only claim the part that relates to your business use.

If you want the bigger picture, see our full sole trader expenses list.

What counts as working from home expenses?

Working from home expenses are costs linked to running your business from your home.

These can include a proportion of:

• Electricity
• Gas and heating
• Water rates (if applicable)
• Council tax (in some calculations)
• Rent
• Mortgage interest (not capital repayments)
• Home insurance
• Broadband and internet
• Business phone usage
• Repairs and maintenance for the business area

For costs like broadband and phone, see our guide to sole trader phone and internet expenses.

What home office costs can sole traders claim?

The exact claim depends on whether you use simplified expenses or actual costs.

Allowable costs under the actual cost method

If you use the actual cost method, you may be able to claim a business proportion of:

• Heat and electricity
• Rent
• Mortgage interest
• Council tax
• Water rates
• Home insurance
• Cleaning
• Repairs and maintenance
• Broadband and internet

You are not claiming the whole household bill — only the business portion.

Actual cost method

The actual cost method involves calculating the real business share of your household bills.

This can lead to a larger deduction, but requires better records.

Pros of actual costs

• Potentially higher claim
• More accurate
• Better for full-time home working

Cons of actual costs

• More admin
• Requires detailed records
• Easier to make mistakes

How to calculate the business-use portion

Your method must be reasonable and consistent.

Common approaches:

• Number of rooms used
• Time used for business
• Share of usage
• Specific business-only costs

Simple room-and-time method

1. Count total rooms
2. Identify business-use room(s)
3. Adjust for time used

Example:

• 1 room out of 4 = 25%
• Adjust for part-time use = lower percentage

Example: simplified expenses

Amir works from home 70 hours per month.

He can claim:

• £18 per month
• £216 per year

Example: actual cost method

Leah has monthly costs of £1,030.

She uses:

• 1 of 5 rooms
• Part-time business use

Estimated business use:

• 10%

Claim:

• £103 per month

What cannot be claimed?

You cannot claim:

• Personal portions of bills
• Mortgage capital repayments
• Full rent or mortgage unless fully business use
• Food and personal living costs
• Overstated business proportions

Common mistakes to avoid

Claiming the full bill

Most home working includes personal use.

Poor cost splitting

Mixed-use costs must be apportioned properly.

Confusing mortgage payments

Only interest may be partially allowable.

Inconsistent calculations

Use a consistent method.

Poor records

You must be able to justify your claim.

Record-keeping advice

Keep:

• Utility bills
• Rent or mortgage interest records
• Broadband bills
• Calculation notes
• Hours worked (for simplified method)

If you want a simple way to stay organised, read our sole trader record-keeping guide.

Many sole traders use accounting software to track expenses and simplify tax.

👉 Compare the best accounting software options here:
/best/accounting-software-sole-trader

Which method is better?

Simplified expenses may suit you if:

• You want simplicity
• Your claim is small
• You are just starting

Actual costs may suit you if:

• You work from home regularly
• Your bills are higher
• You want a more accurate claim

Final answer

Yes — sole traders can claim working from home expenses in the UK, but only the business-use portion.

If you want more detail on related costs, see our guide to sole trader phone and internet expenses.

You can either use HMRC’s flat rate or calculate the actual share of household costs.

The safest approach:

• Choose one method
• Apply it consistently
• Keep records
• Track everything properly