Home Office Allowances

Flat Rate Method

The flat rate method uses simplified amounts each month.
The allowance does not include telephone, so you can add that on top.
The amount you can claim depends on how many hours are for business use each month:

Company Rents Part of Your Home

You may set up a rental agreement between yourself and your limited company – where you, as the director, rent office space from yourself, as the individual.

It must be a formal commercial agreement, and you should charge yourself rent at the market rate. The agreement could also include allowable business costs such utility bills and/or council tax, but you must be able to justify the amounts, and review the agreement regularly.

For your limited company, this will be an allowable expense, but as an individual, there will be tax implications, as you’ll need to declare the rent income on your Self-Assessment Tax Return. If the property is jointly owned, you will need to split the tax according to ownership. 

This can be a complicated method and it generates rental income for you as the individual, meaning you will then need to manage your tax affairs with that regard.

Apportioned Expenses

Another method is to work out how much of your personal home bills are an expense of the business.
That is, how much of an incremental cost does the business generate on your home bills.

You cannot claim for bills that you would incur anyway, without the business, only for ones that are incurred from business use.

Our calculator below can show you an example of what your claim would be.
It uses a method that calculates how much of the bill period you use your home for work, and how many rooms of your home are used for business.

Please note that values used are from 2023, and you should double-check figures used and calculations yourself. This is a guide only.

You can find more information at gov.uk.

https://www.gov.uk/simpler-income-tax-simplified-expenses