Working From Home Allowance
£6/Week Backdated & Actual Cost Methods
HMRC has withdrawn employee working from home tax relief for 2026/27, but the 4 previous tax years are still claimable and the self-employed route is unaffected. Here is how the £6/week flat rate, HMRC simplified expenses and the actual-cost method now work.
Estimate your tax with the working from home allowance: £6/week backdated claims & actual costs
Adjust the figures to see your estimated Income Tax and Class 4 National Insurance for the year.
Total turnover before expenses
Under £1,000 we use the trading allowance automatically
Estimated tax bill
£4,532
12.9% effective rate for 2026/27
- Income tax
- £3,486
- Class 4 NI
- £1,046
Take-home pay
£25,468
after tax, NI and expenses
This is an estimate using HMRC-confirmed rates for 2026/27, not your official tax calculation. TapTax is MTD-compatible, so you can connect to HMRC and file the real figures in a couple of taps.
Working from home has gone from a perk to a norm, and the tax system offers relief for the extra costs it creates, from the heating you would not otherwise have switched on to the broadband you now rely on for work. But the rules are not one-size-fits-all, and they have just moved for one of the two groups.
Status, as at 23 August 2026. HMRC's working at home guidance now opens with this: "From the tax year 6 April 2026 to 5 April 2027, you will not be able to claim tax relief for working from home. You can still claim for the 4 previous tax years." So the employee relief is closed for the year currently running and open for 2022/23, 2023/24, 2024/25 and 2025/26. The self-employed use-of-home deduction is a business expense rather than employment tax relief, and it is not affected by that change.
This guide sets out both routes: the employee flat rate as it applies to the four years still claimable, and the self-employed methods as they apply now.
- Working from home allowance
- Tax relief for the additional household costs incurred by working from home. For employees this is a flat £6 a week or their actual extra costs, now claimable only for the 4 tax years before 2026/27. For the self-employed it is a business expense, claimed through HMRC simplified expenses (a monthly flat rate based on hours worked) or by apportioning actual household bills, and it is unaffected.
The first thing to establish is which camp you are in, because the two systems barely overlap. An employee claims tax relief on a fixed allowance, reducing the tax they pay. A sole trader deducts a business expense from their profit before tax is calculated. The language sounds similar, but the mechanics, the amounts and the eligibility rules are distinct.
- Employee relief is withdrawn for 6 April 2026 to 5 April 2027. HMRC confirms you can still claim for the 4 previous tax years, and 2022/23 closes on 5 April 2027.
- For those backdated years the employee flat rate is £6 a week (£312 a year), claimable only if you had to work from home rather than chose to.
- The self-employed route is unchanged and unaffected: HMRC simplified expenses of £10, £18 or £26 a month depending on hours worked from home.
- Both groups can instead claim actual additional costs, which is often higher but needs apportionment and records.
- Exclusive business use of a room can trigger Capital Gains Tax on sale, so most sole traders keep some private use.
The Employee Route: £6 a Week, for the Four Years Still Open
There is no employee claim for the year currently running. HMRC's position is stated at the top of its guidance: "From the tax year 6 April 2026 to 5 April 2027, you will not be able to claim tax relief for working from home. You can still claim for the 4 previous tax years."
What follows therefore applies to 2022/23, 2023/24, 2024/25 and 2025/26. Those years expire one at a time, four years after the end of each, so 2022/23 closes on 5 April 2027.
For those years the allowance is a flat £6 a week (£26 a month), £312 across a full year, claimable without keeping a single receipt for the amount itself. You do not get £6 in cash; you get tax relief on £6, so the saving is £6 multiplied by your tax rate: £1.20 a week for a basic-rate taxpayer, £2.40 for a higher-rate taxpayer, and £2.70 for an additional-rate taxpayer. Over a full year that is roughly £62 to £140.
The catch is eligibility, and it is stricter than most people assume. During the pandemic, HMRC relaxed the rules so almost anyone working from home could claim. That relaxation ended on 5 April 2022. From 6 April 2022 onward, you can only claim if you have to work from home, meaning:
- Your job genuinely has no office or workplace to attend, or
- Your employer requires you to live too far from the office to travel daily, or
- Government restrictions require you to work from home.
Choosing to work from home for convenience does not qualify. HMRC is explicit that you cannot claim "if you choose to work from home", including where "your employment contract lets you work from home some or all of the time" or where "your employer has an office, but you cannot go there sometimes because it's full". If your employer reimburses your home-working costs, you cannot also claim relief on the same costs.
There is also an evidence rule that catches people out on backdated claims. HMRC states that when you claim, "you must send evidence that you have to work from home" if you are claiming £6 a week for the tax year 2022 to 2023 or later, or claiming the exact amount you have spent. Every year still open falls inside that requirement, so have a contract, a written statement of terms, or employer confirmation to hand before you start.
Employees claim either through their Self Assessment tax return (if they file one) or through HMRC's online employment expenses service using form P87. If you genuinely incurred higher additional costs than £6 a week, you can claim the actual amount instead, with receipts or bills, though HMRC excludes anything used for both private and business use, "such as rent or broadband access".
For a step-by-step walkthrough of backdating each of the four years still open, see our guide to claiming working from home tax relief.
The Self-Employed Route: Simplified Expenses or Actual Costs
Sole traders and partners have a more flexible and often more valuable set of options. Because home-working costs are a business expense rather than personal tax relief, they reduce your taxable profit directly. There are two methods.
HMRC simplified expenses (the flat rate)
The simplified expenses scheme gives a flat monthly deduction based purely on how many hours a month you work from home. No bills, no apportionment, no records of utilities required.
| Hours worked from home per month | Flat-rate monthly deduction |
|---|---|
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 or more | £26 |
Someone working from home full-time deducts £26 a month, or £312 a year. The flat rate covers light, heat and power only. It does not cover rent, mortgage interest, council tax, broadband or telephone, which you can still claim separately on a business-proportion basis even when using the flat rate for utilities.
The actual cost method
The actual cost method lets a sole trader claim a fair proportion of all the additional household running costs caused by working from home. This typically includes a share of:
- Heating and electricity
- Rent (for tenants) or mortgage interest, not capital (for owners)
- Council tax
- Home insurance
- Broadband and telephone for business use
- Repairs and maintenance to business-used areas
The apportionment is usually based on the number of rooms used for business and the proportion of time each is used for work versus private life. For example, a sole trader using one of five rooms as an office for 50 hours a week out of a 168-hour week would claim a fraction of the relevant bills reflecting both the room count and the business hours.
The actual cost method is more work but frequently produces a larger deduction than the flat rate, particularly for those who work long hours from a home with high running costs. The sole trader tax calculator lets you see how a larger use-of-home deduction flows through to your taxable profit, income tax and Class 4 National Insurance.
Worked Example: Flat Rate vs Actual Cost
Sophie is a self-employed graphic designer who works from home around 45 hours a week, comfortably over 101 hours a month. She rents a two-bedroom flat for £1,200 a month and uses the second bedroom solely during working hours as her studio.
Under the flat rate, she claims £26 a month for utilities, £312 a year, plus a business proportion of broadband, which is simple but limited.
Under the actual cost method, she apportions her bills. The flat has four usable rooms (lounge, kitchen, two bedrooms); one is the studio. She uses it for work roughly 45 hours of a 168-hour week. Applying a room-and-time apportionment to her £14,400 annual rent, plus shares of electricity, heating, council tax, insurance and broadband, her reasonable claim comes to around £900 for the year, nearly three times the flat rate.
For Sophie, the actual cost method clearly wins, and the difference, a £588 larger deduction, saves her roughly £170 in income tax and Class 4 National Insurance combined at basic rate. Good record-keeping is what makes the larger claim defensible. Tools that categorise expenses automatically make the apportionment far less painful than a shoebox of receipts.
How the Allowance Interacts With Other Rules
The working from home allowance sits alongside several other tax rules, and a few interactions are worth flagging.
Capital Gains Tax and exclusive use
This is the most important trap for the self-employed. If a room is used exclusively for business, with no private use whatsoever, the part of your home it represents can lose Private Residence Relief and become chargeable to Capital Gains Tax when you sell. The fix is simple: ensure any room used for business also sees some genuine private use, even occasional. This preserves full Private Residence Relief while still supporting a reasonable use-of-home claim. The flat-rate methods avoid this issue entirely because they do not depend on exclusive use.
Business rates
Working from home does not normally make your home liable for business rates, provided the business use is minor and the rooms remain primarily domestic. A dedicated, customer-facing workspace (such as a converted outbuilding used solely as a shop or workshop) could attract business rates and affect Private Residence Relief, so heavy or exclusive commercial use needs careful thought.
Other simplified expenses
The HMRC simplified expenses scheme also covers a flat-rate mileage deduction for vehicles and a flat rate for living in your business premises. You can mix and match: using the simplified flat rate for home working does not stop you using actual costs elsewhere, but you must apply each method consistently within its category.
MTD for Income Tax from April 2026
From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and file quarterly under Making Tax Digital for Income Tax, with thresholds of £30,000 from April 2027 and £20,000 from April 2028. Your use-of-home deduction, whether flat rate or actual cost, will feed into those quarterly updates rather than a single annual return, which makes recording it accurately throughout the year more important than ever.
Choosing Your Method
There is no single right answer; it depends on your hours, your home and your appetite for record-keeping. The flat rate wins on simplicity and is ideal if your home-working costs are modest or your hours are low. The actual cost method wins on value for anyone working long hours from a home with meaningful running costs, especially renters who can apportion a slice of rent. You can review and switch methods each tax year, choosing whichever gives the larger deduction.
The £6-a-week figure gets all the headlines, but for a self-employed person working full-time from a rented flat, the actual-cost method can be worth several times more. The key is keeping the records that justify the larger claim.
If you are self-employed, the practical next step is to compare both methods against your real figures. Run them through the sole trader calculator to see the after-tax difference, and lean on automated expense categorisation to keep the apportionment evidence in order ahead of MTD.
People also ask
Frequently asked questions
- How much is the working from home allowance for 2026/27?
- For employees there is no claim for 2026/27. HMRC's guidance states: "From the tax year 6 April 2026 to 5 April 2027, you will not be able to claim tax relief for working from home. You can still claim for the 4 previous tax years." For those earlier years the flat rate is £6 a week (£312 a year), giving tax relief of £1.20 a week for a basic-rate taxpayer or £2.40 a week for a higher-rate taxpayer. The self-employed position is unchanged: HMRC simplified expenses provide a monthly flat rate of £10 (25 to 50 hours a month), £18 (51 to 100 hours) or £26 (101 or more hours) worked at home, or you can claim actual additional costs.
- Can employees still claim working from home tax relief?
- Not for the current year. HMRC states that from the tax year 6 April 2026 to 5 April 2027 you will not be able to claim tax relief for working from home, though you can still claim for the 4 previous tax years. For those earlier years the eligibility bar remains the post-pandemic one: from 6 April 2022 you can only claim if you have to work from home, for example because your job requires you to live far away from your office or your employer does not have an office. Choosing to work from home, including under a contract that lets you do so, does not qualify. Claims go through your Self Assessment return or HMRC's online employment expenses service, form P87.
- What is the difference between the flat rate and the actual cost method?
- The flat rate (£6 a week for employees, for the 4 backdated years still open, or £10 to £26 a month for the self-employed) is a fixed amount you can claim with no records of bills required, which is simple but often modest. The actual cost method lets you claim the genuine additional household costs caused by working from home, such as a proportion of heating, electricity, broadband and, for the self-employed, a share of rent, council tax and insurance. It can be worth far more but requires you to apportion bills by room and time and keep evidence.
- Can a sole trader claim a proportion of their mortgage or rent?
- A sole trader using the actual cost method can claim a reasonable proportion of rent, and homeowners can claim a proportion of mortgage interest (not the capital repayment), based on the number of rooms used for business and the time they are used. The HMRC simplified flat rate, by contrast, does not let you claim any rent, mortgage or council tax separately because it only covers light, heat and power. Most sole traders choose whichever method gives the larger deduction.
- Does claiming use of home affect Capital Gains Tax when I sell?
- It can, but only if a room is used exclusively for business. If part of your home is set aside solely for work with no private use at all, that portion may lose Private Residence Relief and become subject to Capital Gains Tax when you sell. To avoid this, most sole traders ensure rooms used for business also have some private use, which keeps full Private Residence Relief intact while still allowing a reasonable use-of-home claim.
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