Working from home tax relief is available only if your employer requires you to work from home.
The UK government has not introduced a working from home tax.
Self-employed individuals can claim a variety of home office expenses for tax relief.
Working from home tax relief is still available in specific circumstances, but the rules have changed. This guide sets out who is eligible, how much you can claim and how to apply through HMRC.
Remote work is part of everyday life for millions of us. Whether you’re fully home-based or doing a few days in the office, it’s changed how we live, how we work — and yes, how we think about tax.
So what are the actual tax implications of working from home in the UK? Can you claim relief? Do you need to pay more? And where does that whole “5% remote work tax” idea come from?
Here’s what you need to know.
The Deutsche Bank proposal: A 5% working from home tax
Back in 2020, a team of economists at Deutsche Bank proposed a controversial idea: people who regularly work from home (outside of lockdowns) should pay a 5% daily tax. They argued that this would raise billions that could then be redistributed to lower-paid workers in roles that can’t be done remotely. With more companies now embracing hybrid setups, the strategists believe that remote workers should pay a tax for the privilege.
The suggested tax would apply to employees choosing to work from home rather than being required to. The rationale? Remote workers save on commuting, lunches, and office clothes — so, they argued, the tax wouldn’t leave them worse off.
In the UK, the team estimated this could generate £6.9 billion annually — enough to provide £2,000 grants to the 12% of over-25s earning minimum wage. In the US, it could raise $48 billion a year, and €16 billion in Germany.
Here’s how the maths stacks up:
“A daily 5% working from home tax would cost an employee earning £35,000 just under £7 a day.” — Deutsche Bank economist Luke Templeman, via The Guardian
Unsurprisingly, it sparked fierce debate. Supporters said it could help rebalance inequality created by remote work flexibility. Critics saw it as punishing people for choosing a more flexible (and often more productive) way of working.
Deutsche Bank clarified that their report was designed to spark discussion — not enforce policy. And while some countries explored variations of the idea, the UK has not introduced any tax on remote work.
Still, the conversation hasn’t disappeared. With more workers choosing home or hybrid setups, and city centre economies still recovering post-pandemic, the debate around how — and where — we work continues.
So, do you pay more tax if you work from home?
No — not in the UK.
Despite the headlines, the UK government has never introduced a working from home tax. You won’t pay more tax simply because you choose to work remotely — whether full-time or hybrid.
In fact, in some situations, you might be able to claim tax relief or expenses to help cover the additional costs of home working.
How much can I claim from HMRC for working from home?
If you’re an employee working from home, you may be eligible for tax relief — but only if your employer requires you to work from home.
There are two main ways to claim:
The flat rate (£6 per week)
This is the easiest option. You can claim tax relief on a flat rate of £6 per week, with no need to show receipts. It’s designed to cover extra household costs like heating, electricity, or broadband.
If you pay basic rate tax (20%), this gives you back £62.40 a year. Higher rate taxpayers can claim more.
If you prefer, you can claim the exact amount of extra costs you’ve incurred — but you’ll need:
Evidence of the bills
A reliable method for calculating the work-related portion
Most people go for the flat rate because it’s simpler and doesn’t require as much admin.
Important: You can’t claim if you’re working from home voluntarily, or if your employer already reimburses your expenses.
What if you’re self-employed and working from home?
Self-employed workers have more flexibility when it comes to claiming for home office expenses. You can deduct a proportion of:
Gas and electricity
Internet and phone bills
Rent or mortgage interest
Council tax
Cleaning costs
Office furniture and equipment
You can use:
Simplified expenses (a flat rate based on the number of hours you work from home), or
Actual cost calculation, which is more accurate but takes more effort
Either way, keep your receipts and records. If you use part of your home exclusively for work, that portion becomes eligible for tax relief.
Is working from home still that common?
Yes — and it’s not just a short-term trend.
In 2019, before the pandemic, fewer than 5% of UK employees worked from home. Fast-forward to 2025, and the landscape looks completely different.
According to a recent Forbes Advisor survey, 63% of UK workers now work remotely at least some of the time. Government data from late 2024 showed that:
13% of UK workers were fully remote
27% were working in a hybrid pattern (commuting and working from home)
Fridays are one of the most popular days to stay home, with 65% of hybrid workers logging on remotely
Remote and hybrid working isn’t just about convenience — it’s become a core part of how people live and work. That’s especially true for higher earners and those with degree-level education:
80% of employees earning over £50,000 work remotely or in a hybrid setup
67% of employees with a degree or equivalent do the same
But access to remote work is far lower for lower-income workers. Just 14% of those earning under £10,000 and 24% of those earning £10k–£15k work remotely — which is part of what sparked the debate around equity and proposals like Deutsche Bank’s remote work tax.
But even with the shift, remote workers are still putting in the hours. Around 48% of fully remote workers say they reply to work messages or emails out of hours, and 27% take work calls during evenings and weekends. The flexibility goes both ways.
All signs point to remote and hybrid work becoming the norm for knowledge workers in the UK. The question isn’t whether remote work will stay — it’s how we support it fairly, flexibly, and sustainably for everyone.
Can you claim tax for working from coworking spaces?
If you’re an employee, coworking memberships or desk hire usually can’t be claimed — unless your employer requires it and you’re not already reimbursed.
But if you’re self-employed? That’s a different story.
You can claim coworking space costs as a business expense, provided:
So if you’re self-employed and struggling with home distractions (pets, kids, unstable WiFi...), hiring a local workspace can be both productive and tax-efficient.
Remote work doesn’t have to mean working from home
Whether or not a remote work tax ever becomes a reality, there’s no one-size-fits-all approach. For many people, home is a great place to work — but for others, it’s isolating, cramped or just not practical.
There’s another way: local, flexible workspaces.
By using platforms like Tally, you can:
Book a desk, meeting room or studio by the hour, day or week
Support local businesses while staying productive
Enjoy a professional environment without the long commute
Avoid tax headaches, especially if you’re self-employed
You don’t need to stay stuck at your kitchen table. Whether it’s one day a week or every day, coworking helps you work remotely without being homebound.
Laura Beales is the Co-Founder of Tally Workspace, bringing a unique blend of financial expertise and real estate knowledge to the office space industry. A qualified Chartered Accountant, Laura began her career in finance but transitioned into commercial property after experiencing first-hand the inefficiencies and lack of transparency in the market from a customer perspective.
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