For many employees, working from home has become part of everyday life.
But from 6 April 2026, there’s a major change to the tax rules that could affect employees who currently claim tax relief for homeworking expenses.
In short, employees will no longer be able to claim tax relief directly from HMRC for unreimbursed household costs related to working from home.
Instead, any tax-efficient support will need to come through employers.
How the Old Homeworking Tax Relief Worked
Before the pandemic, employees could only claim tax relief for additional household expenses if:
- They were required to work from home
- The costs were incurred directly because of their employment duties
This could include things like:
- Increased heating and electricity
- Business phone calls
- Certain other household costs linked to work
However, the relief was never available simply because someone chose to work from home for convenience.
What Changed During the Pandemic?
During the 2020/21 and 2021/22 tax years, HMRC temporarily relaxed the rules.
Because so many people were forced to work remotely during lockdowns and workplace restrictions, employees could claim tax relief even if:
- Homeworking wasn’t written into their contract
- They worked remotely because of government guidance
This led to a huge increase in claims.
Why Are the Rules Changing Again?
After the temporary pandemic rules ended, many employees continued making claims under the more relaxed criteria.
HMRC later reviewed those claims and found that a large proportion did not meet the original legal requirements.
As a result, HMRC has now decided to completely remove the ability for employees to claim direct tax relief for unreimbursed homeworking costs.
What Happens from 6 April 2026?
From 6 April 2026:
- Employees will no longer be able to claim homeworking tax relief directly from HMRC
- This applies even if working from home is required by the employer
- It also applies where there is no office available
This is a significant shift from the previous system.
Can Employers Still Support Homeworking Staff?
Yes — and this is now the key route for tax-efficient support.
Employers can still provide certain benefits and reimbursements without creating additional tax liabilities.
- Flat-Rate Homeworking Allowance
Employers can pay employees:
- £6 per week
- Or £26 per month
…tax-free and without National Insurance.
To qualify:
- There must be an agreement allowing homeworking
- The employee must work from home regularly
Even something as simple as an email confirming homeworking arrangements may be enough evidence for HMRC.
- Providing Equipment and Office Items
Employers can also provide:
- Computers
- Office furniture
- Work-related equipment
- Other necessary homeworking items
Provided the private use is insignificant, these can usually be supplied tax-free.
From 6 April 2026, employers can also reimburse employees where purchases were made on the employer’s behalf.
- Reimbursing Actual Household Costs
Employers may reimburse genuine additional household expenses tax-free where:
- The expenses are wholly related to employment duties
- They are additional costs caused by working from home
This might include:
- Increased utility bills
- Business phone costs
However, HMRC generally expects clear evidence supporting the amounts reimbursed.
- Broadband Costs
In some circumstances, broadband costs can also be reimbursed tax-free.
This usually applies where:
- The employee did not previously have broadband
- Homeworking is required
- The broadband is mainly used for business purposes
If those conditions are not met, a taxable benefit could arise.
What Should Employers Do Now?
These changes mean employers may need to rethink their homeworking policies.
Businesses should consider reviewing:
- Employment contracts
- Staff handbooks
- Expense policies
- Homeworking agreements
Without proper arrangements in place, employees could lose access to tax-efficient support entirely.
Need Advice on Homeworking Expenses or Staff Benefits?
As homeworking tax rules continue to evolve, it’s important for both employers and employees to understand what support can still be provided tax-efficiently.
At Jon Davies Accountants, we help businesses across Liverpool and the UK stay compliant while supporting their teams in a practical and tax-efficient way.
If you’d like advice on homeworking allowances, staff expenses or employer tax rules, get in touch with Jon and the team today.
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Any questions?
If you’d like a meeting or a video call to discuss this, please get in touch with your favourite Liverpool accountant
- You can ring us on 0151 380 8080
- You can email us at gr****@*********************co.uk