Example

Worked example

Tax year: 2026-27; Frequency: monthly; Periods: 12; Actual additional costs: £480. Enter your own details to replace this example.

For 12 monthly periods in 2026/27, the company can pay £312.00 under HMRC’s homeworking rate without evidence. Your recorded additional household costs are £480.00; the company may instead reimburse reasonable extra costs actually caused by regular homeworking, if the records and working arrangement support them.

Flat-rate payment without evidence

£312.00

Actual additional costs entered

£480.00

Amount above flat rate needing records

£168.00

• The director or employee must work at home regularly under an agreement with the company. The exemption is for additional household costs, such as extra heating and lighting.
• This calculator does not decide whether a separate rental agreement between the homeowner and company is suitable; rent has different legal and personal tax consequences.

Sources: GOV.UK: tax-exempt homeworking expenses and benefits · HMRC Employment Income Manual EIM01476: how much can be reimbursed