Working from home tax relief has changed – what employers and employees need to know
From 6 April 2026, employees can no longer claim tax relief from HMRC for additional household costs incurred while working from home.
Previously, eligible employees who were required to work from home could claim tax relief on extra costs such as heating, electricity and business phone calls. This could either be based on actual costs, with supporting evidence, or through the flat rate allowance of £6 per week.
That direct claim route has now been removed.
However, this does not mean that all working from home expenses have disappeared from the tax system entirely.
Employers can still reimburse employees for eligible homeworking expenses, and in many cases these reimbursements can still be made tax-free.
Working from home tax relief – What has changed?
The main change is that employees can no longer make their own claim to HMRC for unreimbursed working from home costs.
So, if an employee works from home and pays the additional household costs themselves, they will no longer be able to claim tax relief on those costs after 6 April 2026.
This affects employees who:
- Work from home as part of their employment
- Incur additional household costs because of that work
- Do not have those costs reimbursed by their employer
It does not apply in the same way to self-employed people, who claim business expenses through their own tax return.
Can employers still reimburse working from home costs?
Yes.
Employers can still reimburse eligible homeworking expenses to employees, provided the reimbursement meets HMRC’s rules.
This could include things such as additional household costs linked to working from home, or equipment and services needed for work.
Where the rules are met, these reimbursements can usually be made without deducting Income Tax or National Insurance.
That means the focus has shifted.
Previously, an employee may have claimed directly from HMRC.
Now, if support is being given, it is more likely to come through the employer.
Why employers should review their payroll
Some employers may have automatically included the £6 per week homeworking allowance in employee payslips.
If that is the case, this should now be reviewed.
It is important to check whether:
- The allowance is still being processed through payroll
- It is being treated correctly for tax and National Insurance
- There is a clear policy explaining who is eligible
- The payments relate to genuine homeworking costs
- Any reimbursement is supported by the correct process
This is especially important for businesses with hybrid or remote workers, where arrangements may have evolved over time.
What started as a temporary working from home setup may now have become part of the normal working pattern – but the tax treatment may not have been revisited.
What should employees working from home do?
If you are an employee and you have previously claimed working from home tax relief, you should be aware that this relief is no longer available from 6 April 2026 onwards.
You may still be able to claim for earlier tax years, depending on your circumstances and time limits, but new claims for working from home tax relief will not apply for 2026/27 onwards.
If you regularly work from home and incur additional costs, it may be worth speaking to your employer to understand whether they have a reimbursement policy in place.
What should employers do now?
If you employ staff who work from home, now is a good time to review your approach.
You may want to check:
- Whether any homeworking allowances are currently being paid
- Whether those payments are still appropriate
- Whether your payroll treatment is correct
- Whether your employment contracts or policies mention working from home expenses
- Whether employees understand what can and cannot be reimbursed
There is no requirement for employers to reimburse homeworking costs, but if you choose to do so, it is important that the payments are handled properly.
Need help reviewing your payroll or employee expenses?
This is a small change on the surface, but it could easily be missed – especially where working from home allowances have been set up in payroll and left to run automatically.
If you are unsure whether this affects your business, or whether your payroll treatment is correct, please get in touch with BAS Associates.
We can help you review your current process and make sure everything is being handled correctly.
