Quick answer
If you work from home, you can claim a flat monthly amount based on the hours you work there, or a proportion of your actual household costs. The flat rates are £10 a month for 25 to 50 hours, £18 for 51 to 100 hours, and £26 for 101 hours or more. Record the claim in your software as an expense.
Key facts
25 to 50 hours a month: £10
51 to 100 hours a month: £18
101 hours or more: £26
Phone and internet business use is claimed separately
Flat rate or actual costs
The flat rate is simpler. Working out a proportion of actual costs, such as heating, electricity and council tax, can give a bigger claim if you use a room mainly for work, but you need a reasonable method and records to back it up.
Recording it under MTD
Keep a note of the hours you work at home each month. Add the claim to your software as an expense, monthly or each quarter, so it’s included in your quarterly updates.
Common questions
Can I use the flat rate for a limited company?
No. These flat rates are for sole traders and business partnerships. Companies have different rules.