Relief for additional expenses of working from home

In a post on X, HMRC recently warned taxpayers ‘not to get caught out by ads promising quick refunds for working from home’, urging taxpayers to check that they were eligible before making a claim. This timely reminder highlights a growing area of confusion among UK workers and self-employed individuals. With the shift towards hybrid and remote working now firmly embedded in our working culture, many people are keen to claim tax relief on their home office expenses. However, the rules are stricter than many realise, and getting them wrong could land you in hot water with HMRC. In this post, we’ll break down exactly what you can and cannot claim, and help you work out whether you’re actually eligible.

The Two Methods Explained

HMRC allows relief for additional household expenses if you work from home, but only under specific circumstances. There are two main approaches: the simplified fixed rate method, and the detailed actual expenses method.

The simplified method is the most straightforward. If you meet the eligibility criteria, you can claim a flat rate of £6 per week (or roughly £26 per month, or £312 per year if you’re working the full tax year). This covers your share of household costs such as heating, lighting, and council tax. No receipts or detailed calculations are required—it’s genuinely simple. However, it only applies if you work from home for at least 25 hours per week, or at least 100 days per year.

The detailed method involves calculating your actual additional household expenses and claiming a proportionate share. This is more complex and requires careful record-keeping, but it may result in a larger claim if your home running costs are genuinely higher due to remote work. You’ll need to calculate your share of the overall household expenses and apportion them fairly.

Who Can Actually Claim?

This is where many people go wrong. You can only claim working-from-home relief if you’re required to work from home as a condition of your employment, or you’re self-employed and have no suitable alternative workspace. Simply choosing to work from home one or two days a week—even if your employer permits it—doesn’t make you eligible.

The key word is required. If your employer has an office you could use but has given you the option to work from home, you won’t qualify. Similarly, if you have a dedicated office space elsewhere, HMRC won’t allow a claim for your home.

Self-employed individuals have slightly more flexibility. If you genuinely have no other workspace and work from home regularly, you can claim. However, you must be doing so out of necessity, not merely preference.

Employees vs. Self-Employed: Different Rules

Employees claiming the simplified method can do so via HMRC’s online tax return, provided they’ve been assessed as required to work from home. For the 2024/25 tax year, you can claim up to £312 annually through this method without needing to provide evidence.

Self-employed individuals can claim using either method, and the detailed expenses route may be more beneficial if you’re in a higher tax bracket. If you’re claiming £600 or more in actual expenses, you should ideally keep detailed records and receipts.

Watch Out for These Common Mistakes

Don’t claim for your mortgage interest or rent—these aren’t “additional” expenses, and HMRC is especially vigilant here. Similarly, council tax and business rates aren’t claimable; neither are capital improvements to your home.

Some people try to claim for equipment like desks and chairs, or broadband bills. These fall outside the working-from-home relief scheme, though self-employed individuals may be able to claim them separately as general business expenses if they’re wholly and exclusively for business use.

Finally, if you’ve been using ads or third-party services promising large refunds without proper checks, exercise caution. HMRC is actively investigating suspicious claims.

Getting It Right

If you’re genuinely eligible, claiming relief is straightforward and entirely legitimate. The simplified method is ideal if you want certainty and minimal hassle. Just make sure you meet the eligibility criteria before submitting your claim.

For tailored advice on your specific circumstances—whether you qualify, which method suits you best, and how to claim correctly—contact Severn Accounting. We’re here to help.