Working From Home Relief abolished – What can employees claim instead?

HMRC has abolished working from home tax relief for employees who are not reimbursed by their employer. This includes employees who are contractually required to work from home, and not just those who may choose to work from home rather than an office or other workplace. 

For working from home expenses for company directors and the self-employed, please see our guide here. 

What was the working from home tax relief? 

Up to 5th April 2026, employees who worked from home could make a flat-rate claim of £6 per week (£312 per year) directly to HMRC, without needing to produce receipts. This relief was for the extra household costs associated with working from home rather than an office or other workplace e.g. electricity, heating, water etc. 

The relief was originally only available to employees who were contractually required to work from home. During the COVID-19 pandemic this was expanded so that all employees who worked from home for at least part of the year could make a full year claim. From 2022/23 this reverted to the original pre-COVID-19 rules.  

What has changed from 6th April 2026? 

The flat-rate working from home relief was abolished from 6th April 2026. 

Complete abolition - not just a tightening of the rules 

No employees can claim working from home tax relief directly from HMRC, regardless of whether working from home is a personal choice or a contractual requirement. Even if you have no out-of-home office to go to or are formally required by your employer to work from home, you can no longer submit a claim.  

HMRC stated that there were high levels of non-compliance from employees claiming the relief as over half of the claims they reviewed were found to be ineligible. 

What does this mean in practice? 

• The £6 per week (£312 per year) working from home flat-rate allowance is no longer available from HMRC 
• Claims through self-assessment tax returns or HMRC online services personal tax accounts for home working costs are abolished 
• You cannot claim working from home expenses using the P87 form by post any more 
• Approximately 300,000 households are affected — losing around £62/year (basic rate taxpayers) or £124/year (higher rate taxpayers) 

However, this relief is not the only way that employees can be reimbursed for home working expenses. 

What can employers still do? 

While employees can no longer claim relief from HMRC, employers can still reimburse employees for home working expenses in a tax-efficient way, but only where it is structured correctly.  

Employer paid working from home allowance  

Employers may pay employees up to £6 per week free of income tax and National Insurance Contributions (NICs) and without requiring receipts. There must be a formal agreement in place permitting the employee to work from home to get this tax exemption.  

If there is no formal agreement this allowance could be treated as a benefit in kind (BIK) with the employee paying income tax and the employer paying class 1A NICs on the amounts paid. 

Reimbursement of actual costs 

Alternatively, employers may reimburse the employee for actual, evidenced additional household costs (e.g. utility bills, business phone use). This would be free of income tax and NICs where those costs are necessary to for the employee to do their job. If the costs are partially for personal use, a fair apportionment should be used. 

Employer-provided equipment 

Employers can provide or reimburse the cost of homeworking equipment (computers, office furniture etc) tax-free, provided personal use is only ‘incidental’. 

How can TaxAssist Accountants help? 

TaxAssist Accountants advise both employers and employed individuals on the best ways to deal with expenses in a tax efficient way. Call us on 020 3793 2199 or use our online contact form for a no obligation conversation. 

First published 8 May 2026

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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