Coworking & hot-desk membership

Conditions

• A coworking membership, hot-desk licence or flexible office arrangement used for business is an allowable expense, treated in the same way as rent for business premises. GOV.UK's self-employed expenses guidance lists 'rent for business premises' as an allowable cost (updated November 2024), and a coworking or hot-desk licence falls within this principle.
• The membership or licence must be genuinely used for business work. Where a plan covers both business and personal use — for example a freelancer who also uses the space for personal projects — only the business proportion is deductible.
• For a limited company, a coworking or hot-desk membership paid by the company for a director or employee to use for business purposes is an allowable cost for corporation tax and does not give rise to a benefit-in-kind, provided the space is genuinely used for business.
• Employees cannot claim a personally paid coworking membership as a tax deduction. The employee test — that costs are incurred 'wholly, exclusively and necessarily' in performing the employment duties — is strict, and HMRC's position is that employees are expected to use their employer's premises. The cost of independently arranging workspace is generally the employee's personal choice, not a necessary employment expense.
• If you use the home-office simplified flat rate for a given month, you are claiming for working from home. If you instead work from a coworking space that month, the flat rate would not normally be appropriate for those hours — claim the coworking cost instead, and avoid double-claiming.

Common mistakes

• Claiming a coworking membership that also covers personal or side-project use without restricting to the business proportion.
• An employee claiming a personally paid coworking membership as a tax deduction — this is generally not allowable.
• Double-claiming by running the home-office simplified flat rate alongside coworking membership for the same hours or months.

What to keep

• Membership invoices or subscription receipts from the coworking provider, showing the amount and period.
• A note of the business use if the membership covers any personal work.

Real-world example

A self-employed software developer takes a dedicated hot-desk membership at a local coworking space for £350 per month, using it entirely for client work. The £4,200 annual cost is allowable in full. She no longer claims the home-office simplified flat rate for those months as she is not working from home.

Frequently asked

Related allowances