Working from home

Some of us have to work at home; others see the idea as the perfect solution to a noisy office, endless interruptions, or a long and expensive commute. But if you are seriously thinking of leaving the office on a permanent basis, there are a number of questions you must first consider.

What you can claim

If you are a self-employed person, you can claim costs in your accounts that are incurred wholly and exclusively for the purpose of your business.

Having somewhere to do your business paperwork is essential. If you don't maintain a separate office, you can claim a reasonable proportion of those household running costs that represent the space and time in which your office operation occupies your home. This includes a proportion of your rent, council tax and water rates.

Alternatively, you can make a claim for a fixed rate deduction from your profits, based on the following table:

Deduction: per month or part month

Number of hours worked in the home office Applicable amount
25 to 50 £10
51 to 100 £18
101 or more £26


If you are an employee, you might be able to claim tax relief for additional household costs if you work from home on a regular basis, including because of COVID-19.

These include gas and electricity, metered water, and business phone calls including dial-up internet access.

No tax relief can be claimed if you choose to work from home.

Is it justified?

The relaxed and comfortable atmosphere generated by your home environment may sound good for morale but it is also a key reason for you to question your motives. Make sure you're not looking for an easy option, because this is not it. And make sure that your physical absence is not going to leave your business in serious trouble.

Reclaiming the costs

If you have agreed with your employer that you will work at home for all or part of your working time, your employer can reimburse you for the extra energy used during that time. Your employer can reimburse you the sum of £6 (£26 per month) for each week you work from home tax and NIC free.

If you want to claim more than £6 per week (£26 a month), excluding telephone calls, you must be able to demonstrate that your energy bills have increased by more than this amount.

Can you maintain the work/life distinction?

Working from home offers flexibility but it also requires true self-discipline and organisation. Making a mental and physical distinction between your home and your working life is essential, both to resist the distractions of the television or garden, and, at the other end of the scale, to prevent work from wholly consuming your life.

Creating a dedicated working area is essential, while separate telephone lines for home and business could help you to maintain the boundary between 'work' and 'home' time.

Do you have the right working environment?

Take the creation of your home office seriously. It should be comfortable, well-lit and properly equipped. Working at the kitchen table is rarely conducive to an efficient frame of mind. Bear in mind that you may need to revise your insurance policy to cover business equipment in the home.

Will others support you?

It is one thing to be disciplined yourself - you will also need the support of those around you: beware of constant family interruptions!