Yes, you can claim tax relief for certain home office equipment and furniture if you use them wholly and exclusively for your business. As a UK founder or e-commerce seller working from home, you must follow HMRC rules on what qualifies and how to claim, whether you are self-employed or running a limited company.
Understanding the difference between capital and revenue expenditure is essential. The rules change periodically, so always check the latest guidance on GOV.UK or with HMRC before making a claim. This guide explains the practical steps you need to take.
What counts as qualifying home office items
Qualifying items are those bought specifically for business use and not for private purposes. Common examples include desks, office chairs, computer monitors, laptops, printers, filing cabinets, bookshelves and lighting designed for workspace use. Software licences, broadband routers and stationery can also qualify when they support your daily operations.
Items must be used wholly and exclusively for business. If you also use a laptop for personal streaming or a desk for family paperwork, you cannot claim the full cost. In these cases you may need to apportion the expense based on reasonable business use. Keep clear records showing why you consider the split fair.
General household items such as carpets, curtains or ordinary household lighting rarely qualify unless you can demonstrate they were purchased solely to create a dedicated business workspace.
Capital expenditure versus revenue expenditure
Capital expenditure covers assets that provide lasting benefit to the business, typically items expected to last more than one year. Desks, office chairs, computers and shelving units usually fall into this category. You cannot deduct the full cost in the year of purchase; instead you claim relief over time through capital allowances or, for companies, by depreciating the asset in the accounts.
Revenue expenditure includes running costs that are used up quickly, such as printer ink, paper, minor repairs to equipment, or monthly software subscriptions. These can usually be deducted in full in the year the expense is incurred, reducing your taxable profit for that period.
The distinction matters because it affects both the timing of your tax relief and the records you must keep. Misclassifying an item can lead to adjustments by HMRC during any enquiry. When in doubt, consider the expected useful life of the item and its role in your business.
How to claim if you are self-employed
Self-employed founders and sole traders report home office costs on the self-assessment tax return. For capital items you can use the annual investment allowance where available, or claim capital allowances using the writing-down allowance on the relevant tax return pages. Revenue expenses are entered as business costs in the appropriate boxes.
A simplified expenses method is also available for some. This allows a flat rate claim based on hours worked from home rather than actual costs. Choose the method that gives the most appropriate relief for your situation and keep evidence to support whichever route you select.
Record every purchase with the date, supplier, description, amount and reason for business use. Store digital copies of receipts and invoices in a dedicated folder. Update your records regularly so you can easily complete your self-assessment when the time comes.
How limited companies claim relief
Directors of limited companies can claim through the company accounts. Capital items are added to the fixed assets register and depreciated according to the company’s accounting policy. Revenue items are recorded as business expenses in the profit and loss account. The company then pays corporation tax on the resulting taxable profit.
If the company reimburses a director for equipment bought personally, the payment must be supported by evidence and correctly recorded. Failure to do so can create benefit-in-kind tax charges for the director. Many founders keep a clear paper trail showing the company’s decision to purchase or reimburse the item.
Companies must also consider VAT. If the company is VAT-registered it can usually reclaim VAT on qualifying business purchases, reducing the net cost before capital allowances or depreciation are calculated.
Practical steps to stay compliant
Follow these steps to make a valid claim. First, decide whether the item is genuinely for business use only and document your reasoning. Second, obtain and retain the original invoice showing your name or company name, the date and a clear description. Third, record the purchase in your bookkeeping system under the correct category of capital or revenue.
Fourth, calculate any private use percentage if the item is shared and reduce your claim accordingly. Fifth, include the allowable amount in your tax return or company accounts at the correct time. Finally, keep all records for at least the minimum period required by HMRC in case of questions.
Review your claims each year. What qualified last year may need adjustment if your working pattern changes. Regularly checking GOV.UK keeps you aware of any updates to allowable expenses or capital allowance rates.
Common pitfalls and how to avoid them
One frequent mistake is claiming the full cost of an item that is also used privately. HMRC expects you to make a fair and reasonable apportionment. Another error is forgetting to distinguish capital from revenue, which can inflate or reduce profit incorrectly. Always separate the two in your records.
Some founders claim household bills without first identifying the business portion. Instead, work out the exact proportion of the property used for business and the time spent there, then apply that percentage only to the relevant costs. Overclaiming can trigger an enquiry and repayment demands.
Keep personal and business bank accounts separate where possible. This makes it far easier to identify genuine business purchases and reduces the chance of mixing up receipts. When buying larger items, consider whether leasing or buying outright gives better tax treatment in your specific circumstances.
Making the most of your home office setup
Choose durable, ergonomic equipment that will last and support productive work. A good office chair and suitable desk improve comfort and can reduce the likelihood of future repairs or replacements. When budgeting, factor in both the initial cost and any ongoing revenue expenses such as maintenance or consumables.
Take time to photograph your workspace and note the business area. These images can help support your records if HMRC ever asks for more detail. Update your fixed asset register promptly after each qualifying purchase so your accounts remain accurate.
Founders based at Loomworks in Liversedge benefit from access to desks and a registered address, which may reduce the need for extensive home office claims. Even so, many still buy laptops, monitors or specialist software that can be claimed following the principles above.
Frequently asked questions
Can I claim for a new office chair bought for home working?
Yes, if the chair is used wholly and exclusively for business. It is treated as capital expenditure so you claim through capital allowances or depreciation rather than deducting the full cost immediately. Keep the receipt and note the purchase date and business purpose.
What records do I need to keep for home office claims?
Retain supplier invoices, bank statements showing payment, a note of the business use percentage if any private use occurs, and a record of the date the item was brought into use. Store these securely for the required period in case HMRC requests evidence.
Does using the simplified expenses method affect capital allowance claims?
The simplified method covers certain running costs but you can still claim capital allowances on equipment and furniture separately. Choose the approach that best matches your actual spending and keep clear records to support your choice.
Can my limited company buy equipment and let me use it at home?
Yes. The company records the asset and claims the appropriate relief. You must ensure any personal use is either insignificant or properly reported to avoid benefit-in-kind charges. Document the arrangement clearly in company records.
How often should I review my home office tax claims?
Review them at least once a year before submitting your tax return or finalising accounts. Changes in working habits, new purchases or updates to HMRC guidance can all affect what you can claim.
Related reading: How does using a fulfilment centre affect my VAT obligations?, What is the annual tax on enveloped dwellings for UK companies?, What digital records must UK businesses keep for HMRC?. Browse all tax & finance guides or apply to Loomworks.