Case Studies
UK Tax Reliefs Removed for Homeworking: How the New Rules Affect Remote Workers
As of 6 April 2026 the UK has removed tax reliefs for non-reimbursed homeworking expenses—this article explains who is affected and what alternatives may apply.
By NomadicTax Research Team • 5-8 min read • June 6, 2026
## What changed on 6 April 2026
The UK government has removed the Income Tax deduction for **non-reimbursed homeworking expenses**, which previously allowed employees to claim compensation for extra household utility costs, business-related phone calls, etc. The change is effective as of **6 April 2026**. ([gov.uk](https://www.gov.uk/government/publications/agent-update-issue-142/issue-142-of-agent-update?utm_source=openai))
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## Who is affected?
- All **employees working from home** who have been paying additional utility or telephone or home expenses and were claiming them via Self Assessment or directly from HMRC.
- Excludes reimbursements made by employers. Employers can still reimburse such costs **without deducting Income Tax or National Insurance**, if arranged properly. ([gov.uk](https://www.gov.uk/government/publications/agent-update-issue-142/issue-142-of-agent-update?utm_source=openai))
- Those who have unpaid claims in prior years (going back 4 tax years) may still make late claims if eligible and not previously claimed. ([gov.uk](https://www.gov.uk/government/publications/agent-update-issue-142/issue-142-of-agent-update?utm_source=openai))
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## Why this matters: impacts on UK remote and hybrid workforce
- **Increase in costs**: Homeworking employees now bear full burden of utility, broadband, heating, lighting etc. Increased costs cannot be offset via tax return, unless employer reimburses.
- **Shift in employer responsibility**: Employers who wish to offer help must explicitly reimburse rather than rely on employee deductions.
- **Financial effect**: For someone working from home 5 days a week, utility bills (£ electricity, heating, etc.) could increase annual net costs by hundreds of pounds without relief.
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## Possible strategies and alternatives
- **Negotiate employer reimbursement**
- Encourage your employer to offer a fixed homeworking allowance or reimburse actual expenses.
- If employer provides equipment (desk, monitor, etc.), ensure this is structured as business-supplied equipment, which may be exempt from tax/NI when treated correctly.
- **Document expenses**
- If employer agrees to reimburse, keep good records and invoices to ensure compliance.
- **Tax-efficient employer arrangements**
- Employers could include homeworking allowances in salary package or as part of flexible benefits; proper design may make them tax-efficient.
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## Practical example
Sarah works from home three days per week. Until 6 April 2026 she was claiming £6/week fixed rate for homeworking expenses via her tax return. Post-change, this is no longer allowed. If her employer agrees to reimburse £30/month in additional utilities, that reimbursement—if set up officially—can avoid tax and NI deductions.
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## Summary & actionable takeaways
- Homeworking employees need to reassess their expenses: **no more tax deduction** for non-reimbursed homeworking costs from April 2026.
- Employers can step in: reimburse these costs to avoid undue financial burden.
- Claim old reliefs for previous years if eligible.
- Review your pay structure and expense benefits to see if rearrangements are possible for improved take-home pay.