Compliance
UK’s Removal of Homeworking Expense Relief: What Employees & Employers Must Do Now
From 6 April 2026, UK employees can no longer claim tax relief for additional household costs from homeworking—understanding this change is essential for both workers and employers.
By NomadicTax Research Team • 5-8 min read • May 1, 2026
## Background to the Change
As outlined in the UK’s **Employer Bulletin (April 2026)**, starting **6 April 2026**, the process by which employees can claim **income tax relief** for additional household costs (utilities, phone calls, etc.) incurred due to being required to **work from home** has been **removed**. ([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-april-2026/april-2026-issue-of-the-employer-bulletin?utm_source=openai))
Employers can still reimburse eligible homeworking expenses **without deducting Income Tax or National Insurance**, but the employees’ ability to claim deductions on their personal tax returns is gone. ([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-april-2026/april-2026-issue-of-the-employer-bulletin?utm_source=openai))
## What Employees Need to Know
- **Review previous claims**: If eligible and unused, claims may still be made for the prior **4 tax years**, as allowed by HMRC. This only applies to cost-based or fixed rate claims up to **£6 per week without receipts**. ([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-april-2026/april-2026-issue-of-the-employer-bulletin?utm_source=openai))
- **Reimbursements vs claims**: Where employers provide **working from home reimbursements**, they still remain tax- and NIC-free. So, employees should negotiate such arrangements if their homeworking incurs real costs.
## What Employers Should Do
- **Policy updates**: Update your employee handbooks, expense policies, and internal guidance to reflect that deductions are no longer allowed for these costs, but reimbursements remain valid.
- **Communication**: Clearly inform employees of the removal of this relief and what that means for their tax filings. Overlooking this could create surprise tax liabilities.
## Related Compliance Changes in the UK Also Affecting Employers & Businesses
- **Umbrella company rules**: From 6 April 2026, **PAYE responsibilities** shift where umbrella companies are involved. Agencies and end-clients may now be responsible for tax and NICs if umbrella companies fail compliance. ([gov.uk](https://www.gov.uk/government/publications/agent-update-issue-141/issue-141-of-agent-update?utm_source=openai))
- **CREATIVE Industries relief filing change**: All claims for Creative Industries tax relief or expenditure credits must now include a **new CT600P page** alongside the CT600, starting 6 April 2026. Companies should ensure proper form usage to avoid delays or missed reliefs. ([gov.uk](https://www.gov.uk/government/publications/agent-update-issue-140/issue-140-of-agent-update?utm_source=openai))
## Examples
*A remote employee in England* who used to claim fixed £6/week working-from-home relief will no longer be able to do so from April 2026. If their employer did not reimburse utilities, that cost must now come out of their after-tax personal income.
*A staffing agency working with umbrella companies* should check contracts and confirm who is responsible under the new rules for making PAYE deductions. Missteps could lead to liability if the umbrella company underpays or misreports.
## Tactical Advice Moving Forward
- **Track reimbursements**: If your employer offers reimbursements, keep receipts and ensure they are structured correctly to remain tax-free.
- **Consider salary negotiation**: If working from home is expected, negotiating compensatory packages for energy costs or equipment may now be more important since tax relief is removed.
- **Consult tax professionals**: Especially if you're in a complex setup like a freelance worker, umbrella company, or have split income sources (dividends, savings, etc.), professional advice can prevent unexpected liabilities.
These policy changes underline how the UK tax system is evolving in response to remote work trends and economic pressures. Staying informed and adapting proactively will help both employees and businesses navigate compliance and financial planning effectively.