Can I claim home working expenses through my limited company?
You can often claim some home working costs through your limited company, but the rules depend on how the claim is made. A company director is usually treated as an employee of the company, so the company may be able to reimburse certain additional household costs or provide equipment for business use. However, from 6 April 2026, employees can no longer personally claim tax relief for working from home household expenses for the 2026/27 tax year.
GOV.UK’s employee working from home tax relief guidance explains that, from 6 April 2026 to 5 April 2027, employees will not be able to claim tax relief for working from home, although they can still claim for the 4 previous tax years.
GOV.UK’s homeworking expenses guidance for employers explains the tax and National Insurance position where an employer provides equipment, services, supplies or household expense payments for employees who work from home.
Merranti’s home working expenses guide is a useful starting point because the rules are different for limited company directors, sole traders, employees and landlords.
Directors are usually treated as employees
A limited company director is usually an employee or office holder of the company for tax purposes.
That means the director cannot simply claim home costs in the same way a sole trader might.
A sole trader may claim a business proportion of household costs through the business accounts.
A limited company director usually needs to look at what the company can provide or reimburse without creating a taxable benefit.
This is an important distinction.
The company is separate from the director. The director’s home bills are not automatically company expenses just because the director owns the company.
Merranti’s guide on mixing personal and business money is useful here because using company money for personal or mixed costs can create director loan, benefit in kind or payroll issues.
The simple homeworking payment
One common approach is for the company to pay a modest homeworking allowance.
GOV.UK’s homeworking reporting guidance refers to a weekly limit of £6, or £26 a month for employees paid monthly, for additional household expenses.
This can cover extra costs such as heating, electricity or other household costs caused by working from home.
The benefit of this approach is simplicity.
The company can usually pay the amount without the director needing to calculate exact household usage, provided the conditions are met.
However, the payment should still reflect a genuine homeworking arrangement. It should not be treated as a general tax-free bonus.
The company should keep a basic record of why the payment is being made and when the director works from home.
Can the company pay more than £6 a week?
The company may be able to pay more than £6 a week, but it needs evidence.
GOV.UK’s homeworking reporting guidance says that if payments are above the weekly limit, the employer needs to be able to prove that the payments are no more than the employee’s additional household expenses.
This means the director needs a reasonable calculation.
The company should not simply choose a larger figure because the director wants to extract more money tax-free.
Evidence might include:
extra electricity used for the work area
extra gas or heating costs
business phone calls
reasonable usage records
working pattern evidence
copies of household bills
a calculation of the additional business cost
The key word is additional.
The company is not usually reimbursing the whole household bill. It is reimbursing the extra cost caused by working from home.
What costs can be covered?
Homeworking expenses usually focus on additional household costs.
These may include extra:
gas
electricity
business phone calls
work-related supplies
equipment used for business
services needed for work
GOV.UK’s homeworking expenses overview says homeworking expenses can include equipment, services or supplies provided to employees who work from home, and additional household expenses such as gas or electricity charges for employees who need to work from home.
This does not mean the company can pay every household cost.
Costs such as rent, mortgage payments, council tax, broadband, household insurance and general home costs often need care because they may have both private and business use.
If the cost is mixed, the tax treatment can be more difficult.
Merranti’s business expense guide is useful because a cost being paid by the company does not automatically make it allowable or tax-free.
Equipment for working from home
The company can often provide equipment for business use.
This might include:
a laptop
monitor
keyboard
mouse
office chair
desk
printer
business mobile phone
software
stationery
GOV.UK’s exempt homeworking expenses guidance explains that employers do not need to report or pay tax on equipment, services and supplies provided or reimbursed to an employee who works from home if they are only used for business purposes, or any private use is insignificant.
This can be useful for company directors.
For example, if the company buys a laptop used almost entirely for business, the company may be able to claim the cost and provide it without a taxable benefit.
However, private use should be insignificant.
A laptop used heavily for personal streaming, gaming or family use is not the same as a company laptop used mainly for work.
Broadband and phone costs
Broadband and phone costs are often misunderstood.
If the director already has home broadband and uses it partly for business, the company should be careful before paying the full bill.
The broadband contract may be in the director’s personal name. It may also be used by the household generally.
That makes it harder to treat as a clean company cost.
Business phone calls may be easier to identify if itemised. A separate business mobile phone can also be cleaner.
GOV.UK’s exempt homeworking expenses guidance says mobile phones and SIM cards are not restricted for private use in the same way, but this is limited to one per employee.
This means a company-provided mobile phone can be tax-efficient where it is set up correctly.
The company should not simply pay all household communication costs without reviewing private use.
Rent paid by the company to the director
Some directors ask whether the company can pay rent for using part of the home as an office.
This can be possible, but it needs more care than the simple homeworking allowance.
A formal rental arrangement may require:
a licence agreement
a reasonable commercial amount
evidence of business use
proper company records
declaration of rental income personally
deduction of relevant home costs where allowable
review of Capital Gains Tax risks
review of business rates or insurance issues
This route may be useful in some cases, but it is not automatically better.
If part of the home is used exclusively for business, there can be Capital Gains Tax issues when the property is sold.
Merranti’s home working expenses guide is relevant because the “rent from company to director” route needs to be reviewed carefully rather than copied from generic online advice.
For many small companies, the simple homeworking payment or company-provided equipment is cleaner.
Employee tax relief changed from April 2026
A major change is the removal of employee deductions for working from home household expenses from 6 April 2026.
GOV.UK’s working from home tax relief guidance says that from the tax year 6 April 2026 to 5 April 2027, employees will not be able to claim tax relief for working from home, although they can still claim for the 4 previous tax years.
HMRC’s Employment Income Manual at EIM32759 explains that from 6 April 2026 onwards, a deduction from earnings is no longer permitted for an employee’s additional household expenses.
This should not be confused with employer payments.
HMRC also says this does not affect the exemption for certain homeworking payments made by employers.
That means a director should distinguish between:
the director personally claiming tax relief from HMRC
the company reimbursing homeworking costs
the company providing business equipment
the company paying rent for use of home
These are different routes with different tax treatment.
Home working and Corporation Tax
If the company pays a valid homeworking cost, the company may be able to claim the cost when calculating Corporation Tax.
But the cost still needs to be properly recorded.
Merranti’s Corporation Tax guide is useful because company tax relief depends on taxable profit, allowable costs and correct treatment.
A payment is not automatically deductible just because it has been made.
The company should be able to explain:
what was paid
why it was paid
who it was paid to
how it was calculated
whether there was private use
whether it was reported correctly
whether supporting evidence exists
This is especially important for owner-managed companies, where HMRC may look more closely at director payments.
Home working and director loan accounts
If the company pays personal household costs incorrectly, the payment may not be a valid expense.
It could instead be treated as a director’s loan, salary, dividend or benefit in kind.
For example, if the company pays the director’s full home broadband, mortgage, electricity and council tax without a proper calculation, those payments may need to be adjusted.
This can create unexpected tax issues.
Merranti’s director’s loan guide and guide on how directors accidentally create tax bills are useful because unclear personal spending through a company often becomes a director loan account problem.
A small homeworking claim is usually easier to manage than large unsupported household payments.
Records are important
Home working claims should be supported by records.
The level of evidence depends on the type of claim.
For a simple £6 a week or £26 a month payment, the company should still keep evidence of the homeworking arrangement.
For higher payments, the company should keep a calculation and supporting bills.
For equipment, the company should keep invoices and evidence that the equipment is used for business with insignificant private use.
For rental arrangements, the company should keep formal agreements and calculations.
Merranti’s HMRC records guide is useful because expenses are only as strong as the evidence behind them.
Bank statements alone are not enough.
Common home working expense mistakes
The first mistake is assuming directors can claim like sole traders.
A limited company director is usually treated as an employee, so the route is different.
The second mistake is claiming personal household bills without adjustment.
The company should not usually pay private household costs as ordinary business expenses.
The third mistake is ignoring the April 2026 change.
Employees can no longer personally claim working from home tax relief for 2026/27, although employer homeworking payments are a separate issue.
The fourth mistake is claiming more than £6 a week without evidence.
Higher payments need a reasonable calculation and supporting records.
The fifth mistake is using company equipment privately.
Equipment provided by the company should be mainly for business use, with insignificant private use where the exemption is being relied on.
The sixth mistake is creating a rental arrangement without reviewing wider tax issues.
Rent from the company to the director may create personal tax and Capital Gains Tax considerations.
Speak to Merranti before increasing home working claims
Home working expenses can be claimed through a limited company in some cases, but the method matters.
A proper review should check whether the director is claiming a simple homeworking allowance, actual additional household costs, company-provided equipment, business phone costs, or rent for use of home.
Merranti’s home working expenses guide, business expense guide, HMRC records guide, director’s loan guide and Corporation Tax guide are useful starting points.
If you run a limited company and work from home, contact Merranti Accounting before increasing your home working claim so the company expense, personal tax and record-keeping position can be reviewed properly.
Can a limited company director claim working from home expenses?
Yes, in some cases. The company may be able to reimburse certain homeworking costs or provide business equipment, but the director should not claim personal household costs without checking the rules.
Can I claim £6 a week for working from home?
A company may be able to pay £6 a week, or £26 a month for monthly-paid employees, towards additional homeworking expenses where the conditions are met. GOV.UK’s homeworking reporting guidance explains the weekly limit.
Can employees claim working from home tax relief in 2026/27?
No. GOV.UK’s working from home tax relief guidance says that from 6 April 2026 to 5 April 2027, employees will not be able to claim tax relief for working from home. They can still claim for the 4 previous tax years.
Can my company pay for my home broadband?
It depends. If the broadband is also used privately by the household, the company should be careful. A separate business contract or clearly evidenced business-only cost is usually cleaner than paying the full household broadband bill.
Can my company buy home office equipment?
Yes, the company can often buy equipment for business use. GOV.UK’s exempt homeworking expenses guidance says equipment, services and supplies can be exempt where they are only used for business or private use is insignificant.
Can my company pay rent for my home office?
Sometimes, but this needs care. A rent arrangement may create personal tax, record-keeping and Capital Gains Tax issues. It should be reviewed before being used.
