Working From Home Allowance Calculator
Calculate how much you can claim for working from home. Compare HMRC's simplified flat rate with the actual costs method to see which saves you more.
Tax year 2026/27· Updated with current HMRC rates
Your working situation
Tell us about your work-from-home setup.
Per week, on average
Exclude holidays
Your household costs
Annual amounts. Used for the “actual costs” method comparison. Leave at defaults for a typical estimate.
Exclude bathrooms, hallways, kitchens
Dedicated or mainly used for business
Simplified method
£312/yr
£26/month flat rate
Tax saving: £62 – £125
Actual costs method
£3,570/yr
20% of £16,500
Tax saving: £714 – £1,428
Better for youSimplified method breakdown
HMRC flat rates — no receipts needed
Actual costs breakdown
Proportion of real household bills
Important notes
- • Simplified method: Just track your hours. No need to calculate actual costs or keep utility bills.
- • Actual costs: Keep all household bills and a log of hours worked. More admin, but often a bigger claim.
- • You can switch methods between tax years, but must use one method for the whole year.
- • Capital gains warning: If you have a room used exclusively for business, it may affect your principal private residence CGT exemption when you sell. Most freelancers share the room (e.g., spare bedroom with a desk) to avoid this.
- • Phone bills: claim the business proportion separately (check your itemised bill).
Save your results
Email yourself a copy of these calculations to refer back to later.
How this works
- Simplified rates: HMRC approved flat amounts based on hours worked from home. No receipts or calculations needed.
- Actual costs: proportion of household bills based on rooms used for work. Must keep records.
- Broadband is calculated separately at business use proportion (based on hours).
- Employed workers can claim £6/week flat rate via a tax code adjustment — no employer involvement needed.
- Room count excludes bathrooms, hallways, and kitchens (per HMRC guidance).
- Always consult an accountant for advice specific to your situation.
Working From Home Tax Relief: A Complete Guide
If you work from home — whether as a sole trader, limited company director, or employee — you can claim tax relief on a proportion of your household costs. Many freelancers miss out on hundreds of pounds per year simply because they don't realise they're eligible.
Method 1: Simplified expenses (recommended for most)
HMRC's simplified expenses method lets you claim a flat monthly rate based on the number of hours you work from home. No need to calculate actual costs or keep utility bills — just track your working hours.
- 25-50 hours/month: £10/month
- 51-100 hours/month: £18/month
- 101+ hours/month: £26/month
For a freelancer working full-time from home (35+ hours/week), that's £312/year — a tax saving of £62 (basic rate) to £125 (higher rate).
Method 2: Actual costs
If your household costs are high or you use a significant portion of your home for work, the actual costs method may give you a larger claim. You calculate the business proportion of your household bills based on the number of rooms used for work.
For example, if you use 1 room out of 5 for business, you can claim 20% of eligible household costs. With typical UK household bills, this often works out to £3,000-4,000/year in claims — significantly more than the simplified method.
For employees
Employees who work from home can claim £6/week (£312/year) flat rate tax relief via HMRC's online portal. You'll receive a tax code adjustment and the saving comes through your PAYE automatically. You don't need to keep receipts or calculate actual costs.
Which method should you choose?
Use the calculator above to compare both methods with your actual numbers. In general, the simplified method is better for people with lower household costs or who only work from home part-time. The actual costs method is better if your mortgage/rent is high or you dedicate a large proportion of your home to work.