Sole traders & the self-employed
Working from home: what can you actually claim?
If you run your business from home for 25 hours or more a month, HMRC lets you claim a simplified flat-rate allowance instead of totting up a slice of every bill. Put in your profit and your hours and see the flat rate for 2026/27 — and, more usefully, the real tax and National Insurance it takes off your bill.
Your 2026/27 figures
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The simplified flat rate for 2026/27
Rather than working out what proportion of every household bill relates to your business, HMRC lets you claim a fixed amount per month based on how many hours you work from home. You can only use it if you work 25 hours or more a month from home.
| Hours of business use per month | Flat rate per month |
|---|---|
| 25 to 50 hours | £10 |
| 51 to 100 hours | £18 |
| 101 hours or more | £26 |
The flat rate covers heating, electricity and similar running costs. It does not include phone or broadband — you can still claim the business share of those on top, worked out on their actual cost.
Why the saving isn't the same as the allowance
The flat rate is a business expense, not a tax rebate. It comes off your taxable profit, so what you actually save is the allowance multiplied by your marginal rate — and because it lowers your profit, that means both Income Tax and Class 4 National Insurance.
A quick example
Claim the full £26 a month — £312 for the year — and if your profit sits in the basic-rate band you save 20% Income Tax plus 6% Class 4 NIC. That's 26% of £312 — about £81 off your Self Assessment bill. A higher-rate year saves at 42%, so the same £312 is worth about £131.
Flat rate or actual costs — which is better?
The flat rate is simpler, but if you have high heating bills or pay rent, working out a fair business share of your actual costs can beat it. You're allowed to use whichever is larger — as long as your method for the actual figure is reasonable (usually by number of rooms used for business, and the time you spend working there). Put your own estimate into the box above and the calculator will tell you which one wins.
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Common questions
How much is the working from home allowance for the self-employed?
HMRC's simplified flat rate is £10 a month if you work 25 to 50 hours from home, £18 a month for 51 to 100 hours, and £26 a month for 101 hours or more. Over a full year that's between £120 and £312. You must work at least 25 hours a month from home to use it.
Is the flat rate the amount I get back?
No — it's an expense that reduces your taxable profit, so you get back your marginal rate of it. In the basic-rate band that's 20% Income Tax plus 6% Class 4 National Insurance, so a £312 claim saves about £81. The calculator above works out your exact figure from your profit.
Can I claim actual costs instead of the flat rate?
Yes. You can work out a fair business proportion of your real running costs — heating, electricity, Council Tax, rent or mortgage interest, water — usually split by the number of rooms you use for business and the time you spend working there. You then claim whichever is larger, the flat rate or your actual costs.
Does the flat rate cover my phone and broadband?
No. The working-from-home flat rate covers household running costs only. You can claim the business share of your phone and internet separately, on top, based on their actual cost.
Can I claim if I only work from home a few hours a month?
Not using the simplified flat rate — that needs 25 hours or more a month. If you work fewer hours from home you can still claim a reasonable business proportion of your actual costs; you just can't use the flat rate.
Does using the £1,000 trading allowance change this?
Yes. If you claim the £1,000 tax-free trading allowance you can't also deduct expenses, including this home allowance. It's one or the other, so compare the two — for most established sole traders, deducting real expenses beats the £1,000 allowance.
See what it does to your whole tax bill
The home allowance is one line of your Self Assessment. The number that actually matters is the bill it sits inside — Income Tax, Class 4 National Insurance and what to set aside each month. That's exactly what our Tax Estimator is built for, with every allowable expense in one place.
- Self Assessment Tax Estimator 2026/27 — your whole bill, with expenses, the monthly set-aside worked out for you, and MTD-ready quarterly figures.
- Freelance Day-Rate & Profit Calculator — work backwards from the take-home you need.
- Freelancer Invoice Tracker & Log — paid, outstanding and overdue, automatically.
- Rental Property ROI & Yield Calculator — for anyone with a buy-to-let too.
Excel and Google Sheets. Working formulas, not just formatting. Built and checked by us, with AI assistance, and every calculation verified.
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