Working from home tax relief for employees

Applies to employees for the 2026/27 tax year and the 4 earlier years that can still be claimed; self-employed use of home is covered on a separate page.

The position for 2026/27

GOV.UK states that from the tax year 6 April 2026 to 5 April 2027, employees will not be able to claim tax relief for working from home.

This follows a Budget 2025 measure in which the government said it would legislate in Finance Bill 2025-26 to remove the Income Tax deduction for non-reimbursed home working expenses, taking effect from April 2026.

The change affects relief that employees claim directly from HMRC for costs their employer has not paid back. It does not stop employers reimbursing eligible costs, which is covered below.

Claims for earlier tax years

Claims can still be made for earlier years. GOV.UK says claims can be made for the 4 previous tax years. In those years, relief was available only where the employee had to work from home, for example because the job required living far from the employer's office or the employer had no office. Relief was not available where working from home was a choice, even if the employment contract allowed it.

What could be claimed

Relief covered additional costs relating to work, such as business phone calls or the extra gas and electricity used for the work area. Costs used for both private and business purposes, such as rent or broadband, were not covered. Employees could claim either a flat £6 a week, or the exact extra costs with receipts or bills as evidence.

Relief is given at the employee's rate of Income Tax. GOV.UK gives the example that a basic rate (20%) taxpayer claiming £6 a week receives £1.20 a week in tax relief. From the 2022/23 tax year onwards, evidence that working from home was required is needed even for the £6 a week claim. Relief therefore reduces tax by a percentage of the costs claimed; it does not refund the costs themselves.

How claims are made

Employees who do not file a tax return can claim through HMRC's online service. Anyone who completes a Self Assessment tax return must claim through the return instead.

Allowances paid by employers

Separate rules let employers pay towards homeworking costs. HMRC guidance for employers says that, where an employee regularly works from home under a homeworking arrangement, the employer can pay up to £6 a week (or £26 a month for employees paid monthly) without needing records, and without tax or National Insurance being due.

An employer can pay more than this only if it can show the payments are no more than the employee's additional household expenses. Amounts above the exempt limit, or above the evidenced costs, are treated as earnings, with PAYE tax and National Insurance due. Equipment and services used purely for business purposes are also exempt. HMRC's employer guidance adds that non-exempt amounts are reported on form P11D, with Class 1A National Insurance due on their value.

Where an employer reimburses costs or provides an alternative, the employee cannot also claim relief on the same amounts.

Self-employed people working from home

The 2026/27 change described above concerns employees. Self-employed people who use their home for their business follow different rules, under which a business can deduct allowable costs for the business use of a home.

These are explained on our self-employed working from home expenses page. Someone who is both employed and self-employed needs to look at each set of rules separately.

Publisher: UKTH (uktaxhero.com). This is general information, not personal tax, legal or financial advice.