15 May Working From Home in 2026 : What Can You Still Claim?
It feels like a lifetime ago that we were all suddenly thrust into the world of "Zoom shirts" and kitchen-table offices. Back in 2020, the rules around claiming tax relief for working from home were relaxed to help millions of us adapt. But as we move through 2026, the landscape has shifted significantly.
If you’re still working from your spare room in Biggleswade or running a freelance empire from a garden pod, you’re likely wondering: What can I actually put through the books these days?
HMRC has tightened the belt on some areas while keeping others relatively straightforward. Whether you’re a sole trader, a limited company director, or a remote employee, getting your homeworking expenses right is essential for staying compliant and keeping your tax bill as low as possible.
The "Must" vs. "Choose" Rule: Can Employees Still Claim?
Are you working from home because you want to, or because you have to?
For many employees (those on PAYE), the biggest change over the last few years has been the enforcement of the "must" rule. During the pandemic, HMRC allowed almost anyone working from home to claim tax relief. In 2026, that door is firmly shut for most.
To claim the standard HMRC homeworking allowance as an employee, you must be able to prove that your job requires you to live far from the office, or that your employer doesn't have facilities for you. If you simply have a hybrid "work from home on Fridays" agreement for your own convenience, you generally cannot claim tax relief on your personal tax return for your household bills.
However, if you do meet the strict criteria, you can claim relief on £6 per week (or £26 per month) without needing to keep a single receipt. It isn’t a fortune, but it’s a tax-free contribution toward your heating and lighting.
Sole Traders and Partnerships: The Two Ways to Claim
Do you prefer a simple life or a bigger deduction?
If you are self-employed, you have much more flexibility than an employee. You are essentially using your home as a business premise, and HMRC recognizes that this comes with costs. In 2026, you still have two main paths to choose from: Simplified Expenses or the Actual Cost Method.
1. The Simplified Expenses Method
This is the "no-headache" option. Instead of calculating the exact proportion of your electricity bill, you use a flat monthly rate based on how many hours you work from home each month.
The 2026 rates (which have remained steady for a while) are:
- 25–50 hours per month: £10 per month
- 51–100 hours per month: £18 per month
- 101 or more hours per month: £26 per month
While this is incredibly easy to record in your accountancy services software, it often results in a lower deduction than the actual cost method: especially with the current cost of energy.
2. The Actual Cost Method
This method allows you to claim a fair proportion of your actual household running costs. To do this, you need to work out the number of rooms you use for business and the amount of time you spend using them.
For example, if you have a 5-room house (excluding bathrooms/kitchens) and you use one room solely as an office, you could claim 20% of your eligible bills.
What counts as an "eligible bill"?
- Heating and lighting
- Water (if you use it for business, though this is rare for office work)
- Council Tax
- Rent or Mortgage Interest (Note: only the interest part, not the capital repayment)
- Home insurance
Limited Company Directors: A Different Ball Game
How should you charge your company for the use of your home?
If you run your business through a limited company, you are technically an employee of that company. This means the rules are slightly different. You have two main options to get money out of the company to cover your home costs.
Option A: The £6 per week Homeworking Allowance
The company can pay you £26 per month (£6 per week) as a tax-free reimbursement. The company gets corporation tax relief on this payment, and you don't have to pay any personal income tax on it. It’s clean, simple, and requires no evidence of costs.
Option B: A Formal Rental Agreement
If your home office costs are significantly higher than £26 a month: perhaps you have a dedicated studio or high-power equipment: you might consider a formal license to occupy. This is where you, as the homeowner, "rent" the office space to your company.
Warning: This must be done at a fair market rate. If you overcharge, HMRC will see it as a disguised dividend or salary. Furthermore, the rent you receive is considered personal income, so you must declare it on your Self-Assessment tax return. While the company gets tax relief, you might end up paying tax on it personally, so it’s vital to run the numbers with us first. You can contact us to see which path makes more sense for your specific income bracket.
The Equipment Question: Laptops, Desks, and Chairs
Who owns the laptop?
In 2026, the rules around equipment remain quite generous for business owners. If you buy a laptop, a monitor, or an ergonomic chair wholly and exclusively for business use, you can usually claim the full cost as a capital allowance.
For sole traders, this is straightforward. For limited company directors, it is usually better for the company to buy the equipment directly. If the company buys the desk and "lends" it to you to work, there is usually no "Benefit in Kind" tax to pay, provided any private use is significant.
The Hidden Trap: Capital Gains Tax (CGT)
Don't accidentally lose your Primary Residence Relief.
This is the part that catches many people out. When you sell your main home, you usually don't pay Capital Gains Tax (CGT) because of Private Residence Relief. However, if you claim that a room in your house is used exclusively for business 24/7, you could lose that relief on that specific portion of the house.
To avoid this, most business owners make sure the room has a secondary use. If your office also houses a guest bed or a bookshelf for personal use, it isn't "exclusive," and you generally protect your CGT-free status.
Phone and Internet: Can You Claim the Whole Bill?
In 2026, a stable internet connection is basically a human right for business, but HMRC’s views are a bit more vintage.
- Internet: If you already pay for a home broadband package, you cannot claim the line rental, as you would be paying that anyway. You can only claim a proportion of the "usage" cost, which, with most packages being unlimited, is technically zero. However, if you take out a separate business broadband line in the business's name, the whole thing is deductible.
- Mobile Phones: If the contract is in your company’s name and is used for business, the full cost is usually deductible with no tax for you personally. If you use your personal phone and claim back business calls, you can only claim the actual cost of those specific calls (which is difficult with modern "all-inclusive" minute plans).
Key Takeaways for 2026
Working from home is here to stay, but the tax man is watching more closely than ever. To stay on the right side of the rules, keep these three tips in mind:
- Keep Records: Even if you use the simplified method, keep a log of your hours. If you use the actual cost method, keep digital copies of all utility bills.
- Separate the "Exclusively Business": Be careful with "exclusive" use to protect your home from future Capital Gains Tax.
- Review Yearly: Energy prices and tax rates change. What was the best method for you in 2024 might not be the best in 2026.
At Harrison's Accountancy, we help freelancers, contractors, and local businesses in and around Biggleswade navigate these rules every day. If you’re worried you’re missing out on deductions: or worse, claiming something you shouldn't: we’re here to help.
Check out our blog for more updates on tax changes in 2026, or get in touch with the team for a friendly chat about your specific situation. Don't leave money on the table (or the kitchen counter)!
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