“## Key Compliance Changes Effective from 6 April 2026
1. Removal of non-reimbursed home-working expense deductions
- Employees can no longer claim Income Tax deductions for additional household costs (utilities, phone costs, etc.) incurred while working from home if those costs are not reimbursed by the employer. (gov.uk)
- Employers may still reimburse eligible expenses without triggering tax or National Insurance charges, under new exemptions. (gov.uk)
2. New exemptions for certain employer reimbursements From 6 April 2026, when employers reimburse eye tests / VDU-related appliances, seasonal flu vaccines, and homeworking equipment, these reimbursements are exempt from Income Tax and NICs. (gov.uk)
3. Expanded CIS nil-filing obligations & penalties
- Contractors under the Construction Industry Scheme must file returns every month, including nil returns, or notify HMRC in advance of inactivity. (gov.uk)
- The full CIS late-filing penalty regime has been reinstated as of 6 April 2026. (gov.uk)
Practical Advice for Employers & Tax Teams
- Review reimbursement policies: Do they already reimburse eligible items? If not, consider adding explicit policies for home-working equipment and DSE glasses or tests.
- Adjust payroll systems to treat new reimbursements correctly—so that they do not trigger PAYE/NICs.
- Train HR and finance staff on what counts as exempt qualifying expenditure and how to document it.
- Ensure software compliance for CIS: even if no subcontractor payments occur in a month, either file a nil return or issue inactivity notice. Missed filings can now lead to penalties.
Sample Case
- Case: Office Solutions Ltd. A firm offers its staff £50 voucher for a screen test and reimburses home-working monitors. As of 6 April 2026, both are exempt from tax/NICs if reimbursed correctly. Previously the voucher might have triggered tax. Accurate payroll coding needed.
Risks of Non-Compliance
- Penalties for nil filing CIS being missed in inactive months.
- Employees incorrectly claiming home expenses may be denied deductions.
- Employers misclassifying reimbursed items could trigger PAYE/NIC liabilities retroactively.
Staying ahead of these changes maintains trust with employees and prevents surprise liabilities during audits. Properly structured policies and clear communication are essential for successful compliance this tax year.