Working from home through a limited company: what can directors claim in 2026/27?

In short: Your limited company can still make qualifying tax-exempt payments towards reasonable additional household costs when you work regularly at home under a homeworking arrangement (Income Tax (Earnings and Pensions) Act 2003, section 316A). HMRC accepts £6 a week, or £26 a month for monthly paid employees, without requiring the employer to justify that amount. That employer-payment route is different from claiming personal tax relief for costs your employer has not reimbursed, which ended from 2026/27. HMRC's reimbursement guidance and personal tax-relief page explain the distinction.

For a director working through their own company, identifying the route is the first step. The company and the individual are separate taxpayers, even when one person controls both.

What changed from April 2026?

From the tax year beginning 6 April 2026, employees cannot claim personal Income Tax relief for working-from-home costs through the route described on HMRC's job-expenses page. Eligible claims for earlier years remain possible within the applicable time limits. This change does not mean every company payment for homeworking has become taxable. HMRC's current personal-relief guidance gives the effective date.

Keep these situations separate:

You cannot describe an unpaid company reimbursement as though it were automatically a personal tax refund. Keep the company's decision and the payment record with its expense evidence.

When can a company use the homeworking exemption?

The director must regularly perform employment duties at home under an arrangement with the company. Occasional work brought home informally is different from a regular arrangement. HMRC does not require a formal written agreement, but recording the arrangement makes it easier to establish who works at home, what they do and when it started. HMRC explains homeworking arrangements.

A useful company record states the director's duties, normal homeworking pattern and agreed reimbursement method. It also identifies when the arrangement should be reviewed, such as moving to external premises or stopping regular homeworking.

Using your home as the registered office is not, on its own, evidence that you carry out regular employment duties there. Nor does owning the company turn you into a sole trader for expense purposes.

How does the £6-a-week or £26-a-month payment work?

HMRC's accepted amount simplifies the evidence needed to support the payment's size; the underlying homeworking conditions still matter. A company can use £6 weekly or £26 monthly for a monthly paid employee working regularly at home. Paying more can qualify, but the additional household costs need supporting evidence. HMRC sets out the accepted amounts and evidence requirements.

Illustration: a director has a qualifying arrangement throughout 2026/27 and is paid monthly. The company pays £26 per month, totalling £26 × 12 = £312. It retains the agreement and payment records. Assuming the expenditure also qualifies as a company trading cost, it records £312 in its accounts.

That £312 is an expense payment, not £312 of Corporation Tax saved. If the entire deduction reduces profits taxed at 19%, the illustrative tax reduction is £312 × 19% = £59.28. Different company circumstances change the tax effect. The example assumes sufficient taxable profits, eligibility for the small profits rate and no other adjustment. Check Corporation Tax rates and conditions.

Which household costs qualify for a higher payment?

The employer exemption covers reasonable additional household costs arising from the work. It does not automatically cover a proportion of everything it costs to live in the property. Fixed expenses that would be unchanged without homeworking, such as rent, council tax and mortgage interest, fall outside this additional-cost route. HMRC identifies eligible and excluded household costs.

For an actual-cost claim, retain the bills, calculation and reasoning that identify the extra work-related cost. Heating and lighting the work area are possible examples; a percentage based on room size alone does not prove that every apportioned household bill is additional.

Do not claim the standard payment and then add the same heating costs again. Choose a coherent calculation and check for overlap. If costs relate partly to periods when the arrangement did not apply, separate those periods.

Can the company pay for broadband, a desk or office equipment?

Broadband and office equipment require their own checks. An existing household broadband subscription normally does not create an additional cost merely because it is also used for work. HMRC distinguishes that from a connection the employee was not already paying for and now needs to work under a homeworking arrangement: its fee can be an additional household expense. See HMRC's broadband guidance.

A desk, monitor or laptop is not an additional household running cost under the same exemption. Employer-provided equipment has separate conditions, and buying an item directly through the company can differ from reimbursing an employee's own purchase. Check HMRC's homeworking expenses and benefits guidance before deciding the employee-tax treatment.

The company must also decide whether an equipment purchase is an asset and whether capital allowances apply. The equipment and depreciation guide explains that accounts-to-tax distinction.

What if you want to charge the company rent?

Renting space to your company is a separate arrangement from reimbursing additional household costs. Do not rename mortgage payments as a homeworking allowance. A rental agreement can introduce personal property income, permissions and property-tax questions that the standard employer payment does not resolve. Establish those consequences before the company starts paying rent.

For a straightforward reimbursement, keep the process simple: record the arrangement, choose a supported amount, retain the evidence and record the payment once. Then check whether Taxley supports your company return. Your company accounts and CT600 should reflect the agreed expense treatment; personal claims and employment reporting remain separate tasks.

Frequently asked questions

Does the £6 payment require utility receipts?

HMRC does not require the employer to justify that accepted amount. Keep evidence of the qualifying arrangement and payments; using a higher actual-cost amount requires supporting records.

Can I claim £312 when I only worked at home for part of the year?

Do not automatically claim a full-year figure. Establish the period of the qualifying arrangement and the payment method. £312 is the illustration for twelve monthly payments of £26.

Can I claim both the company payment and personal relief for the same cost?

No double claim should be made for the same expense. In any event, personal homeworking tax relief through HMRC's job-expenses route is unavailable to employees for 2026/27.

Is this the same as a sole trader's use-of-home calculation?

No. The company pays its director as an employer. Sole-trader business expenses use a different framework, so copying a sole trader's calculation can produce the wrong result.

General information, not personalised tax or accounting advice.