Limited company guide
The £6 a week flat rate, the proportional calculation, rental licence agreements between a director and their company, and what HMRC accepts as evidence.
Short answer
A director working from home can be paid £6 a week (£26 a month) by the company with no evidence and no tax charge. A proportional claim based on floor area and hours of business use can be worth more, but it needs a calculation and supporting bills. A formal licence agreement charging the company rent is a third route: the rent is deductible for the company but taxable property income for the director.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityA director working from home can be paid £6 a week (£26 a month) by the company with no evidence and no tax charge. A proportional claim based on floor area and hours of business use can be worth more, but it needs a calculation and supporting bills. A formal licence agreement charging the company rent is a third route: the rent is deductible for the company but taxable property income for the director.
The flat rate
The proportional method
Renting a room to your company
What not to claim
Before you act
£6 a week, paid by the company to the director, requires no receipts and no records of actual cost. Over a year that is £312, deductible for corporation tax and tax free in the director's hands.
It is the right answer for most directors who work from home occasionally or use a corner of a room.
Identify the rooms used for business, the proportion of time they are used for business, and apportion the relevant household costs: heat, light, metered water, and a share of rent or mortgage interest and council tax where a room is used substantially for business.
Keep the calculation, a floor plan and copies of the bills. A claim of a few hundred pounds a year supported by a written method is far more robust than a round figure.
A licence agreement lets the company pay a commercial rent for the space it uses. The company deducts the rent; the director declares it as property income on Self Assessment and can deduct the associated running costs, so the net taxable amount is often small.
Use a written agreement, a rent that reflects local market rates for comparable space, and keep the arrangement non-exclusive so that no part of the home is used wholly for business. Exclusive business use can expose part of the property to capital gains tax on sale.
Costs you would pay anyway and that do not increase because of business use, such as buildings insurance or the full council tax bill, are not claimable in full.
Home office furniture and equipment bought by the company is a different matter and is dealt with as company assets rather than a use-of-home allowance.
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK tax year. Check current GOV.UK guidance, or ask us, before relying on them for your own company.
Primary references
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We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.
Frequently asked
£6 a week with no evidence, or a higher proportional amount supported by a calculation and bills.
It is per employment. Directors of multiple companies cannot multiply the allowance for the same home working.
It can be where you use a substantial space regularly, but it creates property income on your tax return and needs a written agreement.
Only if part of the home is used exclusively for business. Keep any business use non-exclusive to preserve full private residence relief.
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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