How do I calculate the flat rate home office allowance for sole traders in the UK?

HMRC offers a simplified flat rate allowance for self-employed people who work from home. This avoids complex calculations of actual costs and proportions. The flat rates for 2024/25 are: - 25 to 50 hours per month: £10/month (£120/year) - 51 to 100 hours per month: £18/month (£216/year) - 101 or more hours per month: £26/month (£312/year) These rates are designed to cover a proportion of your gas, electricity, and metered water costs. They do not cover phone, broadband, or other costs — you can still claim a business-use proportion of those separately. The flat rate is entered on box 18 of the SA103F (full) or the equivalent simplified return. You cannot claim the flat rate and actual home costs at the same time for the same period. Many self-employed people prefer this method for its simplicity, but if your actual home costs are higher (e.g., high energy bills), calculating the actual proportion may give a larger deduction.

  • Three tiers: £10, £18, or £26 per month depending on hours worked from home
  • Hours threshold: 25–50, 51–100, 101+ hours per month
  • Covers heating and electricity only — broadband and phone can still be claimed separately
  • Cannot mix flat rate and actual cost method for same expenses in same period
  • Claim on your Self Assessment return under 'Use of home' or 'Office costs'

Related Questions

  • Can I claim my home broadband bill as a business expense if I work from home?
  • How do I calculate actual home office costs as a sole trader instead of using the flat rate?
  • How do I claim use of home as office if I rent rather than own my property?