Removal of tax relief on non-reimbursed homeworking expenses
HMRC have announced that, as from 6 April 2026, individuals who are required to work from home to perform their duties will no longer be able to claim a tax deduction for the additional costs that they incur as a result of working from home.
For a number of years, employees who are required to work from home have been able to claim relief in one of two way – either by making a tax relief claim based upon the actual additional expenses incurred (based upon supporting evidence / receipts) or by using HMRC’s agreed fixed rate of £6 per week (no receipts required).
Now that this relief is to be abolished, employees will need to be aware that this claim is no longer available and ensure that their tax codes reflect this and/or that claims are no longer made via their self assessment tax returns (from 2026/27 onwards).
An important point to note here is that this measure does not impact the existing ability for employers to reimburse employees for costs relating to homeworking where eligible without deducting Income Tax and National Insurance contributions.
Whilst employers can reimburse employees based upon actual costs incurred, due to the administrative burden of doing this, most employers will reimburse employees using the fixed rate of £6 per week. No receipts are required for this level of reimbursement.
For many employees the change means that support for homeworking costs may shift from an individual tax claim to looking for assistance from employers.
Employers will need to assess the impact upon employees and determine if any adjustments are required to current practices. This could represent an opportunity for employers to reimburse employees in a tax efficient way.
Employers should:
- assess any impact of these changes and determine if internal policy adjustments are required.
- clearly inform contractual home working employees about the abolition of the work-from-home tax relief and its implications.
- evaluate whether to provide reimbursement for eligible home-working expenses if this is not something that is already provided.
If you would like to discuss the impact of the above noted change in tax legislation, please do not hesitate to contact us at Harling and Kirk Accountants.
Email: office@harlingkirkaccountants.co.uk
Telephone: 01494 306 002