300,000 workers affected by scrapping of work-from-home tax relief
Newsletter issue – January 2026
Workers can currently claim either a flat £6 weekly allowance or actual additional costs, with claims backdated up to four tax years. From April 2026, employees will no longer be able to claim the £6 per week tax relief for home-working expenses. HMRC says the change is to address non-compliance - over half of claims checked were found to be ineligible. It is aiming to ensure fairness across the tax system.
HMRC estimates that around 300,000 employees will be affected by this change, resulting in basic rate taxpayers paying about £62 more per year, and higher rate taxpayers about £124 more.
However, employers can still reimburse home-working costs tax-free (no income tax or National Insurance deductions). So, businesses may need to decide whether to cover costs directly or risk losing staff who can't afford remote work.
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