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Yes, coworking spaces are tax-deductible, but there is a list of conditions set in place by HMRC that must be met.
What Does Tax Deductible Mean?
When we say an expense is tax deductible, we mean it can be deducted from your business income, reducing your taxable profit and, therefore, your tax bill.
But HMRC only allows deductions for costs incurred “wholly and exclusively” for the purpose of your trade, profession, or vocation. If an expense serves some personal purpose, HMRC may disallow part or all of it.
For coworking claims, your use must be business-focused, not a hybrid of leisure or personal work.
Coworking costs fall under the general category of office, property, and equipment expenses for self-employed people in HMRC’s guidance.
Who Can Claim Coworking Space Expenses as Tax Deductions?
A Limited Company
Limited companies can claim the costs of coworking spaces as a business expense. This reduces the company’s taxable profit, lowering its corporation tax liability.
If you’re an employee of a company in a coworking space, your company covers this expense, so you can’t claim it as a tax benefit.
A Sole Trader
Sole traders can claim coworking space expenses directly on their self-assessment tax return as a business expense. This reduces their taxable income, potentially lowering their income tax bill.
As a sole trader, there’s no legal distinction between you and your business. This means there’s generally more flexibility in claiming these coworking expenses, but also less protection against personal liability if things were to go wrong financially.
If coworking becomes your regular, predictable, full-time workspace, then travel to that space will be treated as commuting (non-deductible).
What Coworking Costs Can You Claim?
- Coworking membership/desk rental: The cost of monthly memberships or day-pass fees.
- Utilities & Services (if charged separately): Internet, electricity, printing, etc.
- Meeting Room or Conference Hire: If used for client meetings or business events.
- Extra Services (mail, scanning, lockers): As long as they directly facilitate your work.
- Office Consumables & Supplies: Stationery, printer paper, etc.
- Equipment or Furniture You Bring In: If you purchase it for business use.
- Business Events/Networking at Coworking Space: Fees for business seminars held there, etc.
Generally, travel costs, parking expenses, and mileage claims when commuting to and from a coworking office space are not tax-deductible.
Why Coworking Spaces Are Easier For Tax Purposes
Instead of having to divide up household bills or arguing that your spare room is “wholly and exclusively” for business, you have a clear invoice showing what you spent on the workspace. A fee paid purely for the purpose of working, the kind of business expense HMRC expects to see.
You can claim both coworking and home office expenses within the same tax year, but not for the same hours or activities.
Who Can’t Claim
Employees
If you’re employed and paid through PAYE, you generally cannot claim tax relief on coworking fees you pay out of your own pocket. Even if you’re working remotely from a shared space, HMRC views that as a personal choice rather than a requirement of your job.
If your employer pays for a coworking membership on your behalf, that cost is treated as the company’s business expense, not yours personally. The tax benefit sits with the business.
Casual/Unregistered Freelancers
If you’re earning some side income from freelance work but haven’t officially registered as self-employed with HMRC, you can’t claim coworking costs either. HMRC only allows business expense deductions against business income.
This blog is for educational purposes only and should not be treated as legal or tax advice. Always consult a qualified UK accountant or tax advisor first.
