Working From Home Tax Relief Changes from April 2026
Working from home is now a normal part of working life across the UK. However, significant tax changes coming into force on 6 April 2026 will alter how homeworking expenses are treated – particularly for employees.
These changes, introduced through updates to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA), will remove a long-standing relief many employees have relied upon.
What’s Changing for Employees?
Under current rules, employees who are required to work from home can claim tax relief for additional household costs if their employer does not reimburse them. This is typically done via a self-assessment tax return or a claim to HM Revenue & Customs.
From 6 April 2026
A new provision (Section 360B ITEPA) will:
- Disallow tax relief claims for homeworking expenses made directly by employees
- Apply even where working from home is a contractual requirement
- Cover “household expenses” as defined under existing legislation
What this means
If your employer does not reimburse your homeworking costs:
➡️ You cannot claim tax relief yourself
➡️ Keeping receipts or claiming actual costs will no longer make a difference
2. Employer Reimbursements Still Allowed
There is still some good news.
Employers can continue to provide a tax-free homeworking allowance, including:
- A flat rate of up to £6 per week (no receipts required)
- Or reimbursement of actual additional costs
Tax treatment
- These payments remain tax-free
- No PAYE or National Insurance applies (if conditions are met)
In practice, this means relief is shifting from an employee claim system to an employer reimbursement model.
3. What About Company Directors?
Company directors are treated as employees for tax purposes, so these changes also apply to them.
However:
- Your company can still reimburse you for homeworking costs
- The typical £6 per week flat rate remains widely used
Tax treatment
- Allowable expense for Corporation Tax
- No PAYE or NIC implications (if reasonable)
➡️Directors must ensure costs are paid via the company, not claimed personally.
4. No Changes for the Self-Employed
If you are self-employed (sole trader or partner), these changes do not affect you.
You can continue to claim homeworking expenses using:
Simplified Expenses (Flat Rate)
Based on monthly hours worked from home:
- £10 per month (25–50 hours)
- Up to £26 per month (101+ hours)
Actual Cost Method
Claim a proportion of:
- Heating and electricity
- Council tax
- Rent or mortgage interest
Based on:
- Number of rooms used
- Time spent working
5. Summary of the Changes
| Category | Claim via HMRC | Reimbursement Allowed | Impact from April 2026 |
|---|---|---|---|
| Employees | ❌ No | ✔ Yes (£6/week typical) | Cannot claim relief personally |
| Directors | ❌ No | ✔ Yes via company | Must be reimbursed by company |
| Self-employed | ✔ Yes | N/A | No change |
Final Thoughts
This is a significant shift in how homeworking tax relief operates in the UK. The removal of employee claims means many individuals could lose out unless employers step in.
If you are unsure how these changes affect you, professional advice can help ensure you remain compliant while maximising available reliefs.
