Is broadband and internet
tax deductible?

Partly. The business share of your broadband is allowable, and a line used only for the business is allowable in full (GOV.UK). If you work from home, the flat rate for home working does not cover internet, so the business share of broadband is claimed on top (simplified expenses).

For most sole traders who work from home, broadband is shared with the household. That does not stop you claiming it; it means claiming the part that is genuinely business. And because the simplified home-working rate leaves internet out, broadband is one of the costs you can add even if you use the flat rate for heating and lighting.

Is broadband and internet tax deductible?

The HMRC rule

Items used for less than 2 years, such as stationery, postage, printer ink and phone and internet bills, are allowable expenses. The rule comes from Office, property and equipment, If you work from home, Simplified expenses if you’re self-employed.

GOV.UK lists phone, mobile, fax and internet bills among the office costs a sole trader can claim, and says you cannot claim for any non-business use of premises, phones or other office resources (office, property and equipment). Where something is used for both business and personal reasons, only the business costs are allowable (expenses overview). The working-from-home flat rate does not include telephone or internet, and you can claim the business proportion of those bills by working out the actual costs (simplified expenses).

When you can claim it

• The business share of a home broadband contract used for work and privately.
• All of a separate broadband line or business package used only for the business.
• Broadband at business premises, in full.
• Mobile data and dongles used for business, for the business share.

When you cannot

• The private share of a household broadband contract.
• TV, sport or streaming packages bundled with broadband, unless used wholly for the business.
• Broadband at a second home or holiday home used privately.
• Installation of a line that is purely for the household.

What to claim instead

If working out a percentage feels arbitrary, set up a separate business line or a business broadband package, which is allowable in full and makes the records simple. For the household line, choose a method you can explain, such as the hours you spend working online compared with total use, and apply it consistently.

How to decide if you can claim it

1. Was it for the business? A cost is only allowable if you incur it wholly and exclusively for the business. If it also serves a personal purpose that cannot be separated, such as clothing that keeps you warm or a meal that keeps you going, HMRC disallows it.
2. Is part of it personal? Where a cost has a business part you can identify, such as the business calls on a phone bill or the business miles in a car, you claim that part and leave the rest out, on a reasonable basis you can explain.
3. Is it a running cost or something you keep? It is a running cost, so on the cash basis it counts when you pay it and on traditional accounting when you incur it. Nothing about it needs spreading over later years.
4. Is there a specific rule? For broadband and internet, the deciding rule is stationery, phone, postage and printing: items used for less than 2 years, such as stationery, postage, printer ink and phone and internet bills, are allowable expenses.

Worked example: a home-based bookkeeper

A bookkeeper who works from home pays £420 a year for broadband bundled with a TV package costing an extra £240. She estimates the line is used 40% for work. She claims 40% of the £420 broadband element, £168, and nothing for the TV package. She also uses the £18-a-month home working flat rate, which does not overlap with broadband.

Choosing a business percentage

HMRC expects a reasonable method, not a precise one. Common approaches are time (your working hours online compared with total household use), usage (if your router or provider reports data by device), or people (you are one of four users, but work eight hours a day). Whatever you choose, write down how you reached the figure, apply it every month, and revisit it if you start or stop working from home.

Bundles with TV and phone

Many packages bundle broadband with TV channels, sport and landlines. Only the broadband (and any landline used for business) is a business cost; TV and streaming content is personal unless it is part of what your business does. If the bill does not split the components, use the provider's price for broadband on its own, or apportion the bundle sensibly and note how.

Broadband and the flat rate for home working

The simplified expenses flat rate for working from home, from £10 to £26 a month depending on hours, covers heat, light and power. It does not cover phone or internet, so you can use the flat rate and still claim the business share of broadband. If you instead work out actual home costs, broadband is part of that calculation, not an extra on top.

Where it goes

Broadband goes in phone, fax, stationery and other office costs, box 23 on the full self-employment pages, and the matching category in Making Tax Digital updates. If you include the full bill in your accounts, put the private share in the disallowable column (box 38) so it is added back.

Where it goes on your return and in MTD

On the self-employment pages of your return, the claimable part of broadband and internet belongs in phone, stationery and other office costs (SA103F box 23). The same category is used in Making Tax Digital quarterly updates, so recording it in the right place once keeps both returns consistent.

If your turnover was under £90,000, you can use the short self-employment pages (SA103S), which ask for a single figure for total allowable expenses rather than a box-by-box breakdown, and the full pages let you give just a total in box 31 too. The category still matters for your own records and for Making Tax Digital, where each quarterly update uses the same categories unless you choose to send one consolidated figure.

The accounting basis changes when a cost counts. On the cash basis, the default for sole traders since 2024/25, it counts when you pay it; on traditional accounting, when you incur it, with things you keep claimed through capital allowances.

How much an allowable cost saves

An allowable expense does not come back to you in full: it reduces your profit, so it saves tax at your marginal rate. For a sole trader in England, Wales or Northern Ireland that is 26p in the pound at the basic rate (20% Income Tax plus 6% Class 4 National Insurance) and 42p at the higher rate. The sole trader tax calculator works out the figure for your own profit.

Records to keep

Keep the bills, invoices or receipts, and for anything shared with personal use, a note of how you worked out the business share, such as a sample month of itemised calls or an estimate of business hours online. Recheck the percentage if your pattern of work changes.

If Making Tax Digital for Income Tax applies to you (qualifying income over £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028), the records must be digital, and each quarter's costs go into a quarterly update. Check your date with the MTD requirement checker.

Common mistakes

• Claiming the whole household broadband bill for a line also used privately.
• Including the TV or sport element of a bundle.
• Assuming the working-from-home flat rate already covers broadband.

Related expenses

This item sits in the phone, stationery and other office costs category, alongside laptops and computers, mobile phone, software and subscriptions, stationery and postage and streaming subscriptions. The A to Z of expenses answers the same question for every other cost.

If you record your costs in TapTax, each one lands in the HMRC category it belongs to, with its receipt attached, so your quarterly updates and year-end return use the same figures.