2026-27 · Home Office
Home Office Calculator
Compare the HMRC flat rate (£6/week) against the apportioned method using your actual home costs. Find which claim saves more in corporation tax.
Working from home as a UK limited company director is one of the most legitimate and commonly claimed business expenses — yet most directors default to the HMRC flat rate of £6 per week (£312 per year) without checking whether it is actually the most advantageous option for their situation. In many cases, it isn't.
HMRC provides two methods for calculating the home office deduction. The flat rate method is simple: if you work from home for at least 25 hours per month, you can claim £312 per year as a company expense with no receipts required. This is the default for most directors because it requires no record-keeping.
The apportioned method calculates your actual home running costs — rent or mortgage interest, utilities, council tax, broadband — then applies a business-use proportion based on the number of rooms used and hours worked. For directors with higher home costs, this method can produce a deduction of £600–£1,200 or more per year, significantly outperforming the flat rate.
Either method reduces your company's taxable profit, cutting corporation tax at 19% (small profits rate) or up to 25% (main rate). That means every £100 in valid home office claims saves £19–£25 in corporation tax. Over several years, the difference between choosing the right method adds up. Use this calculator to see which approach puts more back in your company.
Method
Annual deduction
£312
Corp tax saving
£83
Method comparison
CGT reminder
If you use a room exclusively for business, it may reduce your Private Residence Relief on sale. The flat rate method avoids this risk entirely. Seek advice if using the apportioned method for an exclusively-used room.
How it works
- 1
Flat rate (HMRC simplified)
Claim £6/week (£312/year) as a company expense — no receipts needed. Available if you work from home at least 25 hours per month. Reduces corporation tax.
- 2
Apportioned method
Calculate the business proportion of actual home costs: (business rooms ÷ total rooms) × annual running costs. Requires records but can be significantly larger.
- 3
Corporation tax saving
The relief reduces your company's taxable profit. At 19%, every £100 of home office expenses saves £19. At 25%, it saves £25 — more at higher profit levels.
- 4
HMRC reference: EIM32810
The HMRC Employment Income Manual section EIM32810 covers home office expenses for directors. Always use mixed-use rooms to avoid the CGT Private Residence Relief risk.
HMRC sources
Disclaimer: For illustrative purposes only. Actual allowable amounts depend on your specific circumstances. Consult an accountant before making claims.
FAQs
Related calculators