How working from home tax relief works for employees and the self employed in 2026/27, the flat rates, actual costs, and how to claim what you are due.
Working from home has become normal for millions of people, and many can claim tax relief for the extra costs it brings. The rules are different depending on whether you are employed or self employed, and getting them right means you claim what you are due without overstepping. This guide explains working from home tax relief for 2026/27 for both groups.
There are two completely separate sets of rules. Employees can claim a limited, fixed form of relief and only in certain circumstances. The self employed have more flexibility and can claim a fair share of their actual home running costs. It is important to know which set applies to you before you claim anything.
As an employee, you can only claim tax relief if you have to work from home, for example because your job requires it or your employer has no office, rather than simply choosing to. Where you qualify, you can claim a flat rate of £6 a week without needing receipts, and you get relief at your highest rate, so a basic rate taxpayer saves around £1.20 a week. The rules were tightened after the pandemic, so simply choosing to work from home some days no longer qualifies.
You claim through your Personal Tax Account on the HMRC website or on a form called a P87. If your employer already pays you a working from home allowance, you cannot also claim the relief. The relief reduces the tax you pay rather than being a cash payment, and it can be backdated for earlier years where you qualified.
If you are self employed, you have more options. You can claim a fair proportion of your actual household running costs, such as heating, electricity, broadband and council tax, based on how much of your home and time you use for work. Alternatively, you can use HMRC simplified flat rates, which give a set monthly amount based on the number of hours you work from home, removing the need to calculate exact proportions.
For the self employed, allowable home costs generally include a share of heat, light, broadband, phone and some property costs. You need a reasonable basis for the split, such as the number of rooms used for work and the hours involved. Be careful with claiming a large share of costs like mortgage interest or rent, because using part of your home exclusively for business can affect other taxes, so it is worth taking advice if your home is central to your work.
The flat rate methods are simple and safe, and suit most people. Claiming actual costs can give a bigger deduction if you have high bills and use your home heavily for work, but it requires more record keeping. Working out both occasionally lets you choose the more generous option for the year.
Employees can claim a flat £6 a week only if they are required to work from home, while the self employed can claim a fair share of actual home costs or HMRC simplified flat rates.
You can claim £6 a week, and the relief is given at your tax rate, so a basic rate taxpayer saves around £1.20 a week.
As an employee, generally no. The relief applies only where you are required to work from home, not where you simply choose to.
Either a fair proportion of actual running costs based on business use, or HMRC simplified flat rate based on the hours worked from home each month.
The rules for employees changed and are now stricter than during the pandemic. To claim tax relief for working from home as an employee, you must be required to work from home, not simply choosing to. That means there is no suitable workplace available, or your job genuinely cannot be done from your employer's premises. If you work from home by choice, or under a hybrid arrangement where you could go in but prefer not to, you cannot claim. If you are genuinely required to work from home for some or all of the week, you can claim relief on the extra household costs that brings.
Employees have two ways to claim. The simplest is the flat rate of 6 pounds a week, which is 312 pounds a year, with no need to keep receipts or prove anything beyond being required to work from home. The relief is given at your tax rate, so a basic rate taxpayer saves 20 per cent of 312 pounds, which is about 62 pounds a year, and a higher rate taxpayer saves about 125 pounds. The alternative is to claim your actual extra costs, such as the additional heating, electricity and metered water caused by working at home, but this needs evidence and careful calculation, so most employees use the flat rate.
Imagine you are a higher rate taxpayer required to work from home all year. You claim the flat rate of 312 pounds. Because you pay tax at 40 per cent, the relief is worth 40 per cent of 312 pounds, which is about 125 pounds back in your pocket for the year. You do not receive the 312 pounds itself, only the tax you would have paid on it, which is a point that often confuses people.
If you do not complete a tax return, you can claim through HMRC's online service for employment expenses or on a form P87. HMRC then usually gives the relief by adjusting your tax code, so you pay a little less tax each month. If you already complete a self assessment return, you simply include the claim there. You can also backdate a claim for earlier years if you were eligible and did not claim at the time, within the normal time limits.
The position is different and often more generous if you are self employed and run your business from home. You can use HMRC's simplified expenses flat rate, which is based on the number of hours you work from home each month. It is 10 pounds a month if you work 25 to 50 hours, 18 pounds a month for 51 to 100 hours, and 26 pounds a month for 101 hours or more. This covers your light, heat and power, and it has the great advantage of needing no receipts or apportionment, just a record of your hours.
If your home costs are significant, you may do better claiming the actual proportion of your household bills. You work out a reasonable share of costs such as heating, electricity, broadband, and a portion of rent or mortgage interest and council tax, based on the number of rooms you use for business and the time you use them. For example, if you use one room out of six as an office for the working day, you might claim a sixth of the relevant running costs, adjusted for business use. This takes more work but can be worth considerably more than the flat rate for a home based business.
Suppose you are a self employed designer working from a spare room for around 120 hours a month. Using the simplified flat rate you would claim 26 pounds a month, which is 312 pounds for the year, deducted from your profit. If instead your home running costs are high and a fair apportionment came to, say, 900 pounds a year, the actual method would save you far more. It is always worth comparing the two before you choose.
There are limits. You cannot claim for costs that would be the same whether or not you worked at home, such as the basic rent or mortgage on the actual cost method for employees, or ordinary clothing. Employees in particular often wrongly assume they can claim simply for choosing to work from home, when the rules require it to be necessary. And claiming a very large share of your home as business use can create a small Capital Gains Tax issue when you sell, so most people keep a sensible balance. Getting the method and the figures right means you claim everything you are entitled to without overstepping.
Beyond the running costs, there is the question of equipment. If you are self employed, the cost of a computer, a desk, a chair or other equipment used for your business is usually deductible, either in full through the annual investment allowance or as a capital allowance. If you are an employee and your employer provides or reimburses equipment that is mainly for work, that is generally tax free. An employee who buys their own essential equipment and is not reimbursed may be able to claim relief, although the rules here are tighter than for the self employed.
Broadband and phone costs are a common question. If you already pay for home broadband and would have it anyway, an employee usually cannot claim it, but a self employed person can claim the business proportion of the use. Business phone calls can be claimed by both, and a dedicated business line or mobile used wholly for work is fully allowable. The key is to claim the part that genuinely relates to the business and to keep it reasonable.
Hybrid working has made this area more complicated. For employees, remember that relief is only due where you are required to work from home, so splitting your week between the office and home by choice does not usually qualify. For the self employed, hybrid patterns are less of an issue, because you simply claim for the time and space you genuinely use for the business. If your working pattern has changed, it is worth checking that you are claiming correctly under the current rules rather than the more generous pandemic ones.
We are friendly, fully online and work with clients right across the UK. Book a free, no obligation call back and we will explain exactly what applies to you, in plain English.