If you’ve been working from home and claiming tax relief on household costs, extra heating, electricity, internet use, business calls, it’s time to update your expectations. The government has announced it will abolish tax relief for non-reimbursed homeworking expenses starting 6 April 2026. GOV.UK+1
That means anyone who pays their own household bills while working from home and doesn’t get those costs reimbursed by their employer, will no longer be able to claim a deduction. This guide shows exactly what’s changing, who’s affected, and what you should do now to avoid nasty surprises at tax time.
What’s changing – in simple terms
- Until now, if your employer required you to work from home but didn’t reimburse your costs, you could claim extra household expenses either based on actual costs (with evidence) or a flat rate of £6 per week without needing receipts. GOV.UK+1
- From 6 April 2026, that allowance ends.
- Employers can still reimburse business-related homeworking costs and those reimbursements remain tax-free.
Who’s affected
This change affects employees who:
- Work from home for their job
- Don’t receive any reimbursement from their employer for additional household bills (utilities, phone, internet etc.)
It does not affect:
- Self-employed people – this is about employment income
- Employees whose employers reimburse them for homeworking expenses under existing tax-free rules
HMRC estimates around 300,000 people will be impacted.
Why are they doing this?
- In recent years, HMRC found a high rate of invalid or ineligible claims. Over half the reviewed claims failed eligibility checks.
- The Government says the change is needed to prevent abuse and ensure fairness in the tax system.
What’s the financial impact?
- Basic-rate taxpayers currently claiming working-from-home costs stand to lose the equivalent of about £62 per year.
- Higher-rate taxpayers could lose roughly £124 per year.
That might seem small but over multiple years, or combined with other cost increases, it adds up.
What you should do now
If you’re employed and working from home:
- Check whether your employer reimburses work-related homeworking costs. If not, it might be worth asking.
- If they won’t reimburse, you’ll now need to absorb extra costs yourself. Consider whether those costs are manageable or need renegotiation.
If you’re self-employed or a contractor:
- This change doesn’t directly affect you but if you do a mix of employment and self-employed work, it’s a good reminder to check how you’re claiming home office costs, receipts, and expenses.
If you’ve previously been claiming:
- Don’t bother claiming after 6 April 2026, the relief is gone.
- Keep records until then. If you claimed this year, make sure everything’s in order before submission.
What still works: Employer reimbursement & equipment exemptions
The good news is, some home-working expenses remain tax-free:
- If your employer pays or reimburses your utility bills, internet, phone costs, or provides equipment (like a laptop), these remain outside your taxable income as long as the reimbursement rules are followed.
- Employer-provided equipment used mainly for work (or with only minor private use) is tax-free.
So if you work from home a lot, it may be worth asking your employer whether they can help.
Should you change jobs or ask for compensation?
It might feel harsh but remember this: employers aren’t required to reimburse homeworking costs. Still, if the costs added to your workload are significant (higher heating bills, electricity, etc.), you may want to ask for:
- a fixed homeworking allowance
- reimbursement of actual additional costs
- company equipment to reduce your personal expenditure
If enough people push back, some employers may choose to cover these costs rather than lose staff satisfaction.
FAQs
Q: Is any homeworking expense still tax-deductible after April 2026?
A: Yes, if your employer reimburses it (or provides equipment/services), that’s still tax-free.
Q: I occasionally work from home, does this change apply to me?
A: Yes. The measure removes relief for all non-reimbursed homeworking costs.
Q: I’m self-employed, does this affect me?
A: No. This particular change only applies to employees taxed under PAYE.
Q: What if my employer only reimburses part of the cost?
A: Only the reimbursed portion remains tax-free. Unreimbursed costs will no longer qualify for tax relief after April 2026.
How Tax2u can help you adjust
If you’re unsure how these changes affect your finances or whether you’re better off switching to contractor/self-employed status we can help.
- We can review your overall income, expenses and working-from-home situation
- Advise whether it’s worth asking your employer to reimburse costs
- Help you structure expenses in the most tax-efficient way
Talk to Tax2u today and get guidance tailored to your situation.