Understanding the Change
From 6 April 2026, employees in the UK cannot claim Income Tax relief for additional household costs incurred when required to work from home. This includes energy bills, telephone bills, and increased utility costs. Employers however can still reimburse eligible homeworking costs without deducting Income Tax or National Insurance, provided that the reimbursement meets HMRC conditions. (gov.uk)
Examples to Illustrate
- If you used to work from office and now pay more for heating/gas at home due to work, prior years allowed claiming part of this. That ends 6 April 2026.
- If your employer purchases desk, chair, or reimburses them after you buy them, then from 6 April 2026 that reimbursement is tax-exempt if rules followed. (gov.uk)
Actionable Advice
- Employers: Update policies to document and approve purchases of homeworking equipment; ensure reimbursements follow HMRC guidance to avoid tax/NIC liabilities.
- Employees: Submit any remaining claims for homeworking expenses before 6 April 2026 under old rules if eligible.
Broader Planning Implications
- Consider shifting costs such as utilities to the employer reimbursement model.
- Assess whether setting up a formal homeworking allowance structure benefits both sides.
Margin Notes
- This is part of Budget 2025 reform implementing previously announced changes. (gov.uk)
- Compliance risk for employers improper reimbursements; employees making old claims must keep good records.