There are three options for claiming:

As a director, you can claim £6 per week from the company for working from home costs which is an allowable expense for the company against corporation tax and it is not chargeable to income tax for you.

However, you can only claim this if the company does not have a business premises.

You can claim a proportion of your costs including gas, electricity, water, telephone and internet. You’ll need to use a reasonable method of dividing your costs, for example by looking at the number of rooms you use for your business and the time that you spend working from home.

Unlike for the self-employed, you cannot claim a proportion of rent, mortgage interest or council tax as these are considered to be fixed costs and don’t increase as a result of working from home.

It’s important to keep records of the costs and the method used to divide the costs in case HMRC asked to see it.

The other option is that you can charge your company rent to use part of your home. 

You would need to put a rental agreement in place that is signed by both parties and is at a commercial rate. The company then pays you rent at the agreed rate and this is an allowable expense in calculating your company profits.

The rent that your company pays is rental income for you personally and needs to be declared on your personal self-assessment tax return. Ideally the income will be eliminated by the actual costs incurred and therefore no tax will be payable but it will still need to be declared.

Other points to consider if you’re looking at the rental agreement option:

1. You may need to check any rental agreements or mortgages to ensure that you’re allowed to run your business from home.
2. You should check if there is any effect on your home insurance policy.
3. There may be capital gains tax payable if you use part of your home solely for business purposes.
4. You should check that your home would not become subject to business rates.

1. Keep accurate records - document all expenses, including how you calculated business use.
2. Only claim for business use - HMRC is strict about claiming only the portion of costs genuinely associated with business activities.
3. Review your claims annually - as your working pattern and expenses may change, it’s worth reviewing your home working claims each year to ensure they are still accurate.

Navigating home working expenses can be complicated, especially with changing HMRC rules. We can help you ensure you’re claiming the maximum allowable expenses.