Two ways to claim home office expenses — pick the better one

If you work from home as a self-employed freelancer, HMRC allows two methods:

1. Simplified Expenses (flat rate by hours worked at home):
   • 25-50 hours per month: £10 / month (£120 / year)
   • 51-100 hours per month: £18 / month (£216 / year)
   • 101+ hours per month: £26 / month (£312 / year)
   Covers heat, light and power only. Internet, phone and other bills are claimed separately on their business-use proportion.
2. Actual cost method — apportion your household bills by room share (rooms you use for work ÷ total rooms excluding kitchens and bathrooms) and time share (hours worked from home ÷ total hours in the week). Covers all household running costs including rent / mortgage interest, council tax, insurance.

The calculator below runs both so you can compare and pick the better number.

Home office expense calculator

Watch-outs

• Capital gains: if you claim a specific room as 100% business use, HMRC can argue partial loss of main-residence relief on sale. Mixed-use ("my spare room is also the office") is safer than "my spare room is exclusively the office".
• Mortgage interest only — not capital repayments. Rent is fully apportionable.
• Internet, phone, water: claim actual business proportion separately. Don't double-count with Simplified Expenses.
• Limited company directors: this calculator applies to sole traders. For a limited company, use HMRC's £6/week allowance or a formal licence agreement — different mechanism.