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.
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 list of sole trader expenses.
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.
Simplified expenses method
HMRC offers a simplified expenses method for working from home.
Instead of calculating exact household costs, you claim a flat monthly amount based on how many hours you work from home.
HMRC flat-rate bands
• 25–50 hours per month: £10
• 51–100 hours per month: £18
• 101+ hours per month: £26
This covers basic running costs like heat and electricity.
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
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
- Count total rooms
- Identify business-use room(s)
- 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:
/guides/accounting-software/sole-trader-record-keeping
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 full list of sole trader expenses and 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