It’s pretty uncertain out there. Businesses are preparing for postponements, cancellations and potentially staff illness, and of course, further lockdowns. If you are working from home because of coronavirus, one thing is certain; tax deductions are available to help you reduce your domestic costs. Here’s what’s on offer whether you’re employed or self-employed:

If you’re employed or a director of your own company

There’s now an easy way to claim tax relief! At the beginning of October, HMRC launched an online portal offering employees a new way to claim tax relief on £6 per working week. If you’ve been asked to work from home by your employer due to coronavirus, then you’re eligible to claim tax relief if you meet certain conditions.

There are two ways you can claim tax relief:

  • Claim tax relief on £6 a week to cover the additional costs of working from home. That means a tax reduction of 20% on £6 (£1.20) a week if you’re a basic rate taxpayer, or 40% (£2.40 a week) if you’re a higher rate taxpayer.
  • Claim tax relief on a portion of your additional domestic expenses due to working from home. If you believe your costs are higher than £6 a week then you may be able to claim more. Although, you’ll need to ensure you can provide evidence for this through bills, receipts and contracts etc. 

Start the process today by applying directly through HMRC

If you’re self-employed (sole trader)

When you work for yourself, you normally complete a Self-Assessment tax return each year. Self-Assessment provides the option to claim your ‘work-from-home’ expenses, which reduces your tax. 

Here’s an example: if you make £40,000 in sales, but you have £10,000 in normal expenses plus £1,000 in ‘work from home’ expenses, HMRC will only calculate the tax you pay based on £29,000 of profit. Brilliant!

Here are the types of allowable ‘work from home’ expenses you may be able to claim:

  • Heating
  • Electricity
  • Council Tax
  • Mortgage interest or rent
  • Internet and telephone use

Choose the claim option that’s best for you by visiting the HMRC website or by talking to your accountant!

Don’t have an accountant?

Get in touch with our Account Management Specialist if you wish to be referred to one of our partner accountants.


Clear Books: Online accounting software

Clear Books is an award-winning online accounting, payroll & HR software for small businesses. Thousands of business owners, contractors, freelancers and sole traders across the UK use our easy-to-use online accounting software to manage their business finances. All users benefit from the outstanding free telephone and email support. Clear Books was launched in London in 2008 and offers a free 30 day trial with free ongoing support and bank feeds. We’re rated as ‘Excellent’ on Trustpilot.

Get a free 30-day trial of Clear Books online accounting software here.


This is a guide only and not to be taken as advice. Please seek advice from a professional before taking your next step. 

Posted by Clear Books