Compliance
How the Removal of Home-Working Expense Deductions Affects Remote Workers in the UK
With unreimbursed home-working expense deductions abolished from 6 April 2026, employees and digital nomads must adapt quickly to new tax norms and employer policies.
By NomadicTax Research Team • 5-8 min read • May 10, 2026
## What’s changed from 6 April 2026
Legislation now prevents employees from claiming **unreimbursed household expenses** as tax deductions under section 336 ITEPA 2003. These expenses previously covered things like extra heating, lighting, and general household usage for working from home. Importantly, **employer payments or reimbursed expenses** under section 316A ITEPA remain valid and untaxed. Travel costs under section 337 are also still deductible. ([gov.uk](https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim32759?utm_source=openai))
## Who this affects
- Salaried employees and remote workers who pay additional home running costs but whose employer does **not** reimburse them.
- Digital nomads with UK payroll ties but international work arrangements, especially if employer-provided reimbursements are not aligned.
- Employers and payroll software vendors who will need to update policies and systems accordingly.
## Why it matters
- These deductions were previously helpful in lowering taxable income for many working from home. Their removal increases tax liability for employees who used to claim.
- For cross-border workers or remote contractors based abroad but taxed in the UK, this adds complexity—what counts as employer reimbursement vs expense.
## Actionable guidance and examples
| Scenario | Before 6 Apr 2026 | After 6 Apr 2026 | What you should do |
|---|---|---|---|
| Remote worker in a UK company with no reimbursement for extra heating usage | Claim extra heating under section 336 | Cannot claim this deduction | Ask employer to formalise a reimbursed expense arrangement or include home-working allowance under section 316A |
| A digital nomad seconded to UK employer, working abroad but commuting occasionally | Might have claimed household costs under UK tax guidance | No deduction for local household costs unless reimbursed by employer | Maintain clear employer agreements; track employer-paid allowances; consider foreign tax deductions in home jurisdiction also |
## Practical steps
1. **Review employer expense policies** to see if they provide reimbursed payments that qualify under section 316A.
2. **Update payroll software and internal accounting** so that such deductions are no longer processed for unreimbursed expenses.
3. **Document employer payments clearly** – maintain records showing which benefits or allowances are employer-paid.
4. **Seek professional advice** if you're internationally mobile or dual-tax resident to ensure you're not unintentionally taxed unfairly.
## Conclusion
The change removes a legacy deduction which many thought would stay. It sharpens the distinction between employer-paid allowances and employee deductions. For digital nomads especially, clarity and formal agreements with employers are now more important than ever.