If you run your business from the kitchen table or a spare room, you can claim a slice of your household running costs. HMRC offers a no-evidence flat rate that takes minutes, or a share of the real bills if your home costs are high — either way it belongs in your quarterly totals.
What you can claim
The flat rate — £4 a week for 25–50 hours of home working a month, £5 for 51–100 hours, £6 for 101 hours or more. The £6 rate is £312 over a full year.
A share of gas and electricity — using the actual-costs method instead.
A share of water charges — if you are on a meter.
A share of council tax — the business proportion only.
A share of rent — or of mortgage interest, but never the capital repayment.
A share of home insurance and cleaning costs — for the business share of the home.
A room used only for business — one dedicated spare room out of six can justify a sixth of running costs, time-weighted if you work limited hours.
A share of broadband and phone line rental — if you are not already claiming it in the phone category.
What you can't claim
Mortgage repayments — only the interest element, and only the business share.
The whole gas bill when you work at one desk — claim a fair share, not everything.
Both methods at once — flat rate or actual costs, never both.
Home improvements and redecoration — beyond the business share of a dedicated work room.
The flat rate for weeks you didn't work at home at all — such as a fortnight's holiday.
Common mistakes
Over-claiming the proportion is the classic error. A six-roomed house with a laptop in the corner of the living room is not a sixth of your running costs — a modest, defensible percentage is worth far more than a generous one that collapses the moment HMRC asks how you worked it out.
Double counting comes next. If your actual-costs calculation for the home already includes broadband, do not also claim it in the phone and internet category. Your quarterly update totals should each tell one story, with no cost appearing twice.
Finally, plenty of people claim nothing at all. The flat rate needs no bills, no measuring and no working — £312 a year at the top rate, claimed in a few seconds per quarter.
How to record it in your MTD tracker
For the flat rate, make one entry a quarter — £6 × 13 weeks = £78, labelled "use of home, simplified expense". For actual costs, record each bill under Use of home with the business percentage noted, so your quarterly totals and your workings match if anyone asks.
Track all your expenses in HMRC's own categories with the MTD Sole Trader Tracker.