What Expenses Can I Claim When Working From Home in the UK? (2026/27)

If you work from home in the UK, the tax relief available to you depends entirely on whether you are an employee or self-employed. For the 2026/27 tax year, the government has introduced drastic changes that eliminate homeworking tax relief for most employees, while preserving the existing rules for the self-employed and business owners.

Here is an exhaustive guide on what expenses you can claim when working from home in the UK during the 2026/27 tax year.

Employees: Non-Reimbursed Expenses (The 2026/27 Changes)

Historically, employees who were required to work from home could claim tax relief on their extra household expenses (like heating and lighting) under section 336 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).  This allowed employees to claim either their actual costs or a flat rate of £6 per week without providing receipts.

For the 2026/27 tax year, this relief no longer exists. Section 21 of the Finance Act 2026 inserts a new section 360B into ITEPA 2003, which takes effect from 6 April 2026.  This new provision explicitly disallows any income tax deduction from earnings for non-reimbursed additional household expenses that an employee incurs while performing duties at home.

The removal of this relief means:

• You can no longer claim the £6 per week flat rate via your Self Assessment or PAYE coding.
• You cannot claim actual apportioned household running costs.
• This rule applies universally across all professions. For instance, even if you hold a specific role such as a university lecturer or examiner, you cannot claim a deduction for unreimbursed home running costs.

HMRC estimates that removing this relief effectively increases tax by £62 for basic rate taxpayers and £124 for higher rate taxpayers annually.

Home Office Equipment: Claiming relief for purchasing home office equipment (like a desk, chair, or computer) as an employee remains exceptionally difficult. To qualify under section 336 ITEPA 2003, you must prove you incurred the expense “wholly, exclusively and necessarily” in the performance of your duties.  Because the equipment usually provides some personal benefit or puts you in a position to do the work rather than being used in the performance of the work, HMRC routinely denies these claims.

Employees: Employer-Reimbursed Expenses

While you cannot claim tax relief directly from HMRC, your employer can still pay for your home working expenses without triggering a tax charge.

Under section 316A ITEPA 2003, employers can reimburse employees for reasonable additional household expenses tax-free, provided the employee works at home under formal “homeworking arrangements”.

• The Conditions: You and your employer must have an arrangement (which should ideally be in writing) requiring you to regularly perform some or all of your duties at home.  It does not apply to informal evening catch-ups.
• Covered Expenses: The employer can reimburse you for the extra costs of day-to-day running of the home, such as increased gas, electricity, and metered water, as well as business telephone and internet costs.

The Self-Employed (Sole Traders & Partnerships)

The 2026/27 changes target employees, meaning self-employed individuals (sole traders and partners in a partnership) can still claim deductions for the business use of their home. If you are self-employed, you can choose between two methods to calculate your claim:

Method A: Simplified Expenses (Flat Rate)

To save time, section 94H of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005) allows self-employed individuals to claim a flat-rate deduction based on the number of hours spent working from home.

The flat rates for 2026/27 remain:

• 25 to 50 hours per month: £10 per month
• 51 to 100 hours per month: £18 per month
• 101 or more hours per month: £26 per month

To use this, you must work a minimum of 25 hours per month wholly and exclusively on core business activities at home.  Crucially, claiming this flat rate covers your household running costs, but it does not prohibit you from claiming a separate, apportioned deduction for fixed costs (like council tax, mortgage interest, and insurance) or telephone/broadband bills, provided you can identify the business proportion.

Method B: Actual Costs (Apportionment)

If your expenses are significant, calculating the actual business proportion of your home expenses usually yields a higher deduction. You can calculate the trade proportion of your total actual costs based on floor space and time used.

Deductible costs under this method include an apportioned share of:

• Heating and lighting
• Rent or mortgage interest (but not the capital repayment of the mortgage)
• Council tax and water rates
• Home insurance
• Broadband and telephone costs (if private use is not significant, the full cost of the broadband service can often be claimed).

For home office equipment (computers, printers, furniture), self-employed individuals can usually claim the full cost as a deduction using the Annual Investment Allowance (AIA) under the capital allowances regime.

Summary Table: 2026/27 Working From Home Expenses

For completeness, if you are a company director operating through your own limited company, you are technically an employee of that company. Therefore, you cannot claim the personal tax relief under section 336 (which is abolished), but your company can reimburse you tax-free under section 316A for the extra costs of running your home office, which is a deductible expense for Corporation Tax purposes.

Next steps: To ensure compliance, self-employed taxpayers should review their apportioned ‘actual costs’ calculation to confirm it accurately reflects their business usage footprint for the 2026/27 tax year. Employers should review their employment contracts to confirm that “homeworking arrangements” are explicitly documented to protect tax-free reimbursements.