The government has confirmed a major change that will affect many employees. The working home tax relief rules are changing, and the long-standing deduction for homeworking costs will soon be withdrawn.
In the Budget update on 26 November 2025, it was announced that this relief will end from the start of the 2026 to 2027 tax year. As a result, employees will no longer be able to claim working home tax relief for home office expenses that are not reimbursed by their employer, including the £6 per week flat rate.
For many employees, the end of working home tax relief means higher personal costs unless employers choose to provide support.
What Is Changing
For several years, the UK tax system allowed employees to claim a deduction if they were required to work from home under HMRC rules.
This will change from 6 April 2026. From that date, a deduction will not be available for homeworking expenses unless they are reimbursed by an employer. Claims through a P87 form or Self-Assessment tax return will no longer be accepted.
Responsibility for supporting these costs is now being shifted from HMRC to employers.
What You Can Still Claim Before April 2026
The current rules remain in place until the end of the 2025 to 2026 tax year. However, eligibility criteria are already stricter than they were during the pandemic.
Since 2024, employees can only claim relief if they are genuinely required to work from home. This usually requires written evidence, such as a clause in an employment contract confirming that homeworking is mandatory.
The arrangement cannot be based on personal choice. If an employee can choose between working at home or in the office, the relief is not available.
In addition, the employer must not provide a suitable workplace, or the nature of the role must make regular travel unreasonable.
Where these conditions are met, the flat rate deduction of £6 per week can still be claimed until April 2026.
The Only Option After April 2026
Although the personal tax deduction will be removed, employer reimbursements will still be allowed.
Employers can pay staff up to £6 per week tax free to cover homeworking expenses. They may also reimburse actual costs if supporting evidence is provided.
The key difference is that the payment must come directly from the employer rather than being claimed from HMRC. When paid this way, the allowance remains free from Income Tax and National Insurance.
Employees who are required to work from home may wish to discuss this with their employer or HR team. A homeworking allowance may be introduced as a result.
Why the Government Is Making This Change
The government has said the change is intended to simplify the system and improve fairness.
During the pandemic, the rules were expanded and many more people became eligible to claim relief. This created confusion and increased the administrative burden for HMRC.
By removing the individual claim option, the decision is now being placed with employers. They will determine whether homeworking costs should be reimbursed.
Need Advice?
These changes may affect both employees and employers, especially where remote working is written into contracts.
If you are unsure how the new rules apply to you or your business, contact the team for advice and guidance.