Working from home tax relief to be abolished

From April 2026, employees will no longer be able to claim a tax reduction from HMRC for extra household costs incurred due to being required to work from home. Previously, these claims could cover increased utility bills and business related telephone calls, either based on actual costs (with supporting evidence) or at a fixed rate of £6 per week without receipts. 

What this means for employers

Where eligible, employers may continue to reimburse employees for these expenses without having to deduct Income Tax or National Insurance contributions. 

Employers should:

• review and revise internal policies related to home-working arrangements to reflect the upcoming changes
• clearly inform employees about the abolition of the work-from-home tax relief and its implications
• evaluate whether to provide reimbursement for eligible home-working expenses
• check that payroll procedures are updated and compliant with the new tax rules.

More information can be found on gov.uk website.