- Simplified expenses give you a flat monthly amount by hours worked, with no calculations
- Or claim a reasoned share of actual costs by rooms and hours, which is more work and often more money
- Business rates can apply to a part of your home used exclusively for business, which is one reason not to use a room exclusively
- Check your mortgage or tenancy, since some prohibit trading from the property
- If customers visit or you store stock, planning use class and your insurance both change
Simplified expenses: a flat monthly amount by hours worked. No calculation, no records, no argument.
Actual proportion: a share of heating, lighting, council tax and broadband by rooms and hours. More work, usually more money.
What to avoid: using the room exclusively for business. It can bring business rates into play and complicate the position on your home. Keep it a spare room that you also work in.
Want me to work out both figures on your actual bills?
The warning matters more than the claim. Exclusive use is the trap.
The flat rates for working from home
A sole trader can claim £10 a month for 25 to 50 hours of business use at home in that month, £18 for 51 to 100 hours, and £26 for 101 hours or more. Or claim a reasoned share of actual costs instead, by rooms and hours: a cost used partly for the business is allowed only for a business part you can identify and split out. As of Oct 2026.
Income Tax (Trading and Other Income) Act 2005 ss.34 and 94H
A limited company director works under different rules. The company can pay you for using your home, under a rent agreement or a flat weekly rate for employees, and MARCUS can set that up properly.
Business rates on premises
In England, Small Business Rate Relief is 100% up to £12,000 rateable value, tapering to nil at £15,000, and if you take on a second property from 27 November 2025 you keep it for 36 months (As of Sep 2026). Retail, hospitality and leisure premises under £51,000 rateable value pay the 38.2p small business multiplier for 2026/27, and the old 40% retail, hospitality and leisure relief ended on 31 March 2026. England also adds a temporary 1p Transitional Relief Supplement unless the property receives Transitional Relief or Supporting Small Business relief. Wales gives 100% relief up to £6,000, tapering to £12,000, and Scotland has the Small Business Bonus Scheme. As of Oct 2026.
GOV.UK 5/2025: confirmation of budget package and the non-domestic rating multipliers for 2026/2027; business rates for England, Wales and Scotland after the 1 April 2026 revaluation (Valuation Office Agency and council guidance)
| Rateable value x 39.2p: the 38.2p multiplier plus the 1p supplement | £5,488 |
| Small Business Rate Relief: (£15,000 minus £14,000) / £3,000 = 33.3% | -£1,829.33 |
| Bill for the year | £3,658.67 |
Taking a lease in England or Wales? Check whether it is contracted out of the Landlord and Tenant Act 1954 Part II. If it is, you give up the security of tenure the Act gives a business tenant, so ask before you sign, not when the lease ends. Scotland and Northern Ireland have their own rules.
I work from [home or premises] running a [type of business] in [England, Scotland, Wales or Northern Ireland], using [describe the space] for about [hours] a week. What can I claim, which method is better for me, what will I pay in business rates, and what should I avoid doing?
Every lesson ends with a question to hand to a Greymill specialist, who answers with what it knows about your business.