Can I claim my home office as a business expense?
Answered 11 March 2026
Can I Claim My Home Office as a Business Expense?
Yes — but the rules depend on your status (self-employed vs employee) and how you use the space. Here is a structured summary:
What the Law Says
The fundamental rule is that no deduction is allowed for expenses not incurred wholly and exclusively for the purposes of the trade. However, where an expense is incurred for more than one purpose, a deduction is permitted for any identifiable part or proportion that is wholly and exclusively for trade purposes.
This means the test for a home office is not "all or nothing" — you can apportion costs between business and private use.
HMRC Guidance / Practice
1. Self-Employed Individuals Only
This guidance applies to Income Tax for self-employed individuals. It does not apply to employees or directors (who are subject to separate rules).
2. The Core Requirement: "Wholly and Exclusively" During Use
- The part of the home used for trade must be used solely for trade purposes at the time it is being used — it does not need to be a permanently dedicated room.
- If a room is used simultaneously for business and private purposes at the same time, no deduction is due.
- The question is whether there are periods when part of the home is used solely for trade purposes.
3. A Definite Part Must Be Set Aside
A deduction is only available where you can show that a definite part or proportion of the home is being used for business purposes. You cannot simply reclassify general living costs as "use of home as office" where no part is set aside for business use.
4. How to Apportion Costs
Where a claim is justified, you apportion total household running costs (e.g. heating, lighting, insurance, repairs) using one or more of these factors:
| Factor | How Applied |
|---|---|
| Area | Proportion of rooms (or floor area) used for business |
| Time | Hours/periods the space is used solely for business |
| Usage | Metered consumption (e.g. electricity, gas) |
The courts have confirmed that apportionment on a time basis is acceptable — you can allow the cost of a room during the hours it is used exclusively for business.
5. Practical Example
HMRC gives the example of Bert, who uses one room out of 10 as his office once a week. Rather than claiming 1/10 of total costs (£450), he estimates £104 as a reasonable reflection of actual use — and HMRC accepts this as a reasonable estimate requiring no enquiry.
6. Simplified Expenses (Flat Rate) — Available from April 2013
As an alternative to apportioning actual costs, sole traders and individual partnerships (not limited companies) may use a flat rate deduction based on the number of hours worked at home per month. This is entirely optional.
⚠️ Once you choose the simplified expenses method for a year, you cannot later switch back and claim actual costs for that year.
7. Capital Gains Tax Warning
Using part of your home exclusively for business may affect your Principal Private Residence relief on a future sale. HMRC guidance cross-references CGT consequences at CG64650 onwards.
Summary
| Situation | Can You Claim? |
|---|---|
| Self-employed, room used solely for business during working hours | ✅ Yes — apportion by area/time/usage |
| Self-employed, no room set aside at all | ❌ No |
| Self-employed, prefer simplicity | ✅ Yes — use flat rate simplified expenses |
| Employee working from home | ⚠️ Different rules apply (EIM32760 onwards) |
| Limited company director | ⚠️ Different rules apply |
Citation sources
This chapter explains what expenses are allowable when a self-employed individual carrying on a trade uses part of their home for trade purposes. The guidance applies to Income Tax only. It does not apply to the use of home by an employee or director - for this see EIM32760 onwards. Other related guidance includes: Home to work travel - BIM37600 onwards Where is the place of business - BIM37675 Historic houses - BIM58605 Living accommodation for the proprietor is not a business expense - BIM37
A person may make a choice between alternatives allowable under the Taxes Acts which, with hindsight, leads them to pay more tax than they would have done had they made a different choice. This does not mean that the tax was not due. Example Simon is a sole trader who runs his business from an office in his home. Under the simplified expenses rules (BIM75010) he used a flat rate deduction of £26 per month to cover the use of his home for business purposes in his 2013/14 return. After the deadlin
A deduction in respect of the business use of the subcontractor’s home depends on the nature and the extent of any business activity being carried on there (see BIM37665). If significant business activity is carried out in the home, a deduction will normally be due. But such a deduction is only due where the subcontractor can show that a definite part or proportion of their home is being used for business purposes. See BIM37650 for guidance on how expenditure should be apportioned in these circu
Bert runs a small business. He uses the spare bedroom at home as his office except for a week at Easter and a week at Christmas. All he does is to write up his records, once a week. The house has 10 rooms. Bert calculates that his trade expense, based on 1/10 of the total costs would be £450. Bert recognises that this is far too much for what he actually does at home. Bert estimates that £104 covers the cost of the proportion of the establishment costs, plus the electricity for heating and light
Part 2 Trading income Chapter 4 Trade profits: rules restricting deductions Wholly and exclusively and losses rules Expenses not wholly and exclusively for trade and unconnected losses 34 1 In calculating the profits of a trade, no deduction is allowed for— a expenses not incurred wholly and exclusively for the purposes of the trade, or b losses not connected with or arising out of the trade. 2 If an expense is incurred for more than one purpose, this section does not prohibit a deduction for an
a reasonable estimate consistent with the underlying facts. The extent of trade use is a question of fact. Enquiries are only likely to be worthwhile where the amount claimed is significant and appears to be inconsistent with the nature of the taxpayer’s trade. Different traders organise their businesses in different ways. There is no fixed proportion of costs allowable in a particular type of business, although the same type of trade conducted in the same way may be expected to result in simila
There is nothing in S34(1)(a) ITTOIA 2005 and S54(1)(a) CTA 2009 about apportioning expenditure, for example allowing the ‘trade proportion’ only. On the face of things the statutory test is all or nothing. But you should not interpret S34(1)(a) ITTOIA 2005 and S54(1)(a) CTA 2009 as requiring that the whole of the expenditure be incurred wholly and exclusively for the purposes of the trade, profession or vocation. Where a definite part or proportion of an expense is wholly and exclusively laid o
Chapter 5A ITTOIA 2005 The Government has introduced simpler rules for some business expenses which can be used from April 2013 onwards. The rules allow businesses to calculate these expenses using flat rate allowances or adjustments rather than apportioning actual expenditure. The simplified expenses rules can be adopted by all sole traders and business partnerships (excluding those with a corporate partner), whether they also use the cash basis or not, and are entirely optional. Limited compan
S34 Income Tax (Trading and Other Income) Act 2005 Tax law says that an expense is only allowable as a deduction if it is incurred ‘wholly and exclusively for the purposes of the trade’. If an expense is incurred for more than one purpose, this rule does not prohibit a deduction for any identifiable part or identifiable proportion of the expense which is incurred wholly and exclusively for the purposes of the trade. This page explains what is meant by part of the home being used ‘wholly and excl
S34 Income Tax (Trading and Other Income) Act 2005 This page and the examples at BIM47825 explain how to apportion expenditure where a self-employed person’s home is used partly for trade and partly for other purposes. If you need more detailed guidance on when you can apportion expenditure to arrive at the allowable trade expense, this can be found at BIM37600 onwards. The courts have approved apportioning household expenses. Templeman J in Caillebotte v Quinn (1975) 50 TC 222 at page 227F-G sa