What is working from home tax relief in 2026/27?

From 6 April 2026, the rules for working from home tax relief changed significantly. Employees can no longer claim an Income Tax deduction from HMRC for unreimbursed additional household costs, even where they are required to work from home. HMRC estimates that around 300,000 individuals will be affected by the removal of the relief.

The change applies throughout the 2026/27 tax year, but it does not mean that all working from home allowance arrangements have disappeared. Employers can still reimburse eligible additional household costs tax-free, subject to the relevant conditions, and employees may still be able to make claims for eligible previous tax years. Understanding the difference between an HMRC working from home allowance, an employer reimbursement, and the old employee tax deduction is therefore essential for businesses managing remote or hybrid teams. The term “working from home tax allowance” is often used to describe both employee tax relief and employer payments. These are not the same thing. In 2026/27, employees cannot claim the former for current unreimbursed household costs, while qualifying employer payments can still be tax-free.

What is working from home tax relief in 2026/27?

The working from home tax relief available to employees has changed for the 2026/27 tax year. Previously, employment income rules were different. Eligible employees could claim Income Tax relief for certain additional household costs where they were required to work from home and their employer did not reimburse those costs. From 6 April 2026, the employee deduction has been removed.

This means searches such as “HMRC working from home allowance”, “HMRC claim working from home” and “claim tax relief working at home” need to be treated differently in 2026/27 from previous years. The HMRC process still exists for eligible historical claims, but it cannot be used to claim a deduction for current 2026/27 unreimbursed homeworking expenses.

What changed from 6 April 2026?

The change was introduced through legislation that prevents a deduction for unreimbursed additional household expenses from 6 April 2026. It specifically affects the employee's ability to obtain tax relief from HMRC; it does not remove the existing exemption allowing employers to reimburse homeworking expenses without Income Tax and National Insurance deductions.

For employers, this distinction is particularly relevant. An organisation can still choose to support employees with eligible homeworking expenses, but an employee cannot simply replace that employer reimbursement with an HMRC working from home claim for 2026/27.

Can employees claim working from home tax relief in 2026/27?

From 6 April 2026 to 5 April 2027, employees cannot claim an Income Tax deduction from HMRC for additional household costs incurred because they work from home. This includes costs such as additional gas and electricity, and qualifying business telephone costs that previously formed part of the relief.

⚠️Warning: An employee cannot create eligibility simply because their contract permits remote or hybrid working. Under the previous rules, employees who chose to work from home when they could work at their employer's premises were not eligible. The current rule goes further by removing the employee deduction for 2026/27 altogether.

Can employees still claim working from home tax relief for previous years?

Although current tax relief for employees working from home has been removed, eligible employees have not lost the ability to make historical claims. Employees can still claim for the four previous tax years, provided they met the relevant conditions in those years and have not already claimed. The eligibility rules applying to the particular year should be checked rather than applying today's rules retrospectively.

Which previous tax years can be claimed?

During the 2026/27 tax year, the four previous tax years are 2022/23, 2023/24, 2024/25 and 2025/26. A claim for tax relief for job expenses still needs to meet the conditions applicable to the relevant year; the fact that someone worked remotely does not automatically make them eligible.

📌Example: An employee who was required to work from home during 2024/25 and paid eligible additional household costs themselves may still be able to make a historical claim if they meet HMRC's requirements. By contrast, someone looking to claim their unreimbursed homeworking costs for 2026/27 cannot use the old relief.

Is there still a deadline for historical claims?

Employees should not assume that historical claims can remain open indefinitely. Claims can be made for the four previous tax years. The further back a claim relates to, the more important it is to check whether it remains within HMRC's permitted period.

💡Good to know: Employees completing a Self Assessment tax return working from home claim should make the claim through their tax return rather than using the separate HMRC online service. For employees who do not complete the Self Assessment, HMRC provides the relevant process for job-expense claims

How much was the working from home tax allowance?

Before its removal, the employee relief was based on either a flat-rate amount of £6 per week or the actual additional costs incurred, where the relevant evidence was available. However, the £6 figure should not be described as a current 2026/27 employee working from home allowance because the deduction itself has now been removed. For historical claims, the tax saving depended on the employee's Income Tax rate and allowance rather than being a £6 cash payment. For example, a basic-rate taxpayer claiming £6 of eligible expenses received tax relief equal to 20% of £6, rather than £6 itself.

How did the £6 weekly calculation work?

Under the previous rules, an eligible employee could use £6 per week without calculating their exact additional household costs. The tax relief was calculated at the employee's applicable Income Tax rate.

📌Example: At the 20% basic rate, £6 of eligible weekly expenses produced £1.20 of tax relief per week. At a 40% higher rate, the same £6 produced £2.40 of tax relief. These calculations are relevant to historical claims, not a new 2026/27 HMRC payment.

Can employees use a working-from-home tax relief calculator?

A working-from-home tax relief calculator can be useful for understanding historical tax savings, but it should not be used to suggest that employees can claim the old deduction for 2026/27. It is crucial to take into consideration whether there are non-taxable payments or benefits for employees. The relevant calculation depends on the tax year, eligibility, and whether the employee uses the flat-rate method or eligible actual costs. 

For 2026/27, the key calculation for employers is different: a business considering an employer payment can use the £6 per week or £26 per month benchmark for qualifying additional homeworking expenses and benefits that are exempt from taxes.  

What costs can be covered when working from home?

The removal of employee work-from-home relief does not mean that homeworking costs are automatically taxable. Employers can still reimburse qualifying additional household expenses under the existing exemption, provided the relevant conditions are met.

Costs such as additional heating and lighting, increased metered water use and certain business telephone or internet costs are potentially relevant. Costs that would have been incurred regardless of working from home, such as ordinary rent or mortgage costs, do not become qualifying additional household expenses simply because an employee works remotely.

Which household costs can employers reimburse?

Qualifying working from home allowance payments can cover reasonable additional household expenses incurred because of homeworking. Employers can pay £6 per week or £26 per month without requiring evidence of the employee's exact additional expenditure.

👉To note: If an employer pays more than the benchmark amount, it must be able to demonstrate that the payment does not exceed the employee's reasonable additional household expenses. If payments exceed the qualifying amount, the excess can become earnings subject to PAYE tax and Class 1 National Insurance.

Which costs are not covered?

Ordinary household costs that would remain the same whether an employee worked at home or elsewhere are generally not qualifying additional expenses. HMRC specifically excludes costs such as rent, mortgage interest and council tax from the additional household-cost exemption.

Broadband also needs careful treatment. If an employee already had a broadband connection before working from home, reimbursing that existing cost does not generally qualify as an additional household expense under the traditional exemption. A new connection required for homeworking can qualify where the relevant conditions are satisfied.

How can employees claim tax relief for working from home?

For 2026/27, there is no new HMRC claim for working from home for unreimbursed additional household expenses. The old employee deduction has been removed, so employees should not submit a new claim expecting a tax refund for their current-year homeworking costs.

Historical claims remain possible where the employee qualifies. This is why searches such as “HMRC claim working from home” and “HMRC claim for working from home” can still lead to relevant HMRC guidance, but employers should make sure employees understand that the process now relates to earlier tax years.

How do employees make a historical HMRC claim?

Employees who do not complete the Self Assessment can use HMRC's job-expense claim process for eligible previous years. For postal claims, HMRC requires evidence showing that the employee was required to work from home, such as an employment contract or other evidence where the requirement is not included in the contract.

📌Example: An employee who was required to work from home during 2025/26 and paid qualifying additional household costs without reimbursement may still investigate a claim for that year. An employee who simply chose to work remotely during 2026/27 cannot use the former relief to claim those costs.

What if the employee completes the Self Assessment?

Employees who complete a Self Assessment tax return working from home should make the claim through their tax return rather than using HMRC's separate online service. This applies to eligible historical claims where the employee satisfies the rules for the relevant tax year.

Employers should therefore avoid telling employees to submit a current-year working from home claim tax simply because they work remotely. Instead, businesses should explain whether they reimburse qualifying costs under their own home and hybrid working policy and direct employees to HMRC for historical claims where appropriate.

What working from home allowance can employers pay tax-free?

The removal of employee tax relief does not prevent employers from reimbursing qualifying homeworking expenses. In 2026/27, employers can still make tax-free payments towards reasonable additional household costs where the statutory conditions are met.

This is the key distinction businesses need to communicate: no employee HMRC is working from home allowance for current unreimbursed costs, but there is still an employer exemption for qualifying payments.

Can employers still pay £6 a week?

Yes. An employer can pay £6 per week or £26 per month to an employee who regularly works from home under qualifying homeworking arrangements without requiring evidence of the exact additional cost.

💡Good to know: The £6 payment is not an automatic statutory entitlement. Employers should decide whether they will provide it and document the arrangement clearly. Acas recommends that home and hybrid working policies explain what costs employees are expected to cover, what the employer will pay, how costs can be claimed and what is taxable.

Can employers reimburse homeworking equipment?

Yes. From 6 April 2026, tax and National Insurance exemptions were expanded for certain reimbursements of work-related costs, including qualifying equipment that employees need to work effectively from home. This means employers can reimburse eligible equipment costs where the statutory conditions are satisfied without creating an Income Tax or National Insurance charge.

📌Example: If an employee purchases qualifying equipment needed to perform their duties from home and the employer reimburses the cost under the applicable rules, the reimbursement may be exempt. Employers should distinguish this from simply paying an employee's general household expenses, which remain subject to their own specific rules.

How should employers manage working from home tax relief in 2026/27?

For employers, the 2026/27 change is less about removing support for homeworking and more about separating employee tax relief from employer reimbursement. Payroll and HR teams should update internal guidance so employees are not directed towards an outdated HMRC claim for working from home for current-year expenses.

A clear homeworking policy can also reduce confusion over who pays for equipment, internet access and additional household costs. Acas recommends that policies explain the costs employees are expected to cover, what the employer will provide or pay for, how expenses should be claimed and how tax treatment applies.

What should a homeworking policy include?

An effective policy should explain whether the organisation offers an employer working from home allowance, the amount available, who is eligible and how employees submit claims. It should also distinguish between household expenses and equipment or services provided for work.

👉To note: Addressing practical issues such as expenses and equipment, internet access, health and safety, security, privacy and responsibility for costs is recommended. This gives employees a clearer understanding of the financial and practical arrangements before home or hybrid working begins.

What should employers check in payroll?

Payroll teams should ensure that qualifying homeworking payments are treated correctly and that any amount above the exempt limit is supported by evidence. If an employer pays more than the employee's additional household expenses, the excess can become earnings and require PAYE tax and Class 1 National Insurance treatment.

The 2026/27 rules make one distinction particularly important: employees can no longer claim working from home tax relief from HMRC for current unreimbursed household expenses, but employers can still provide qualifying tax-free homeworking payments. The benchmark remains £6 per week or £26 per month, provided the conditions for the exemption are met.

For employers, the next step is to review the organisation's homeworking policy, payroll process and expense policy to make sure they reflect the rules from 6 April 2026. Businesses should also make sure employees understand the difference between an employer-paid working from home allowance and a historical HMRC tax-relief claim.

Warning: Do not simply carry forward wording from older guidance that tells employees they can claim £6 per week from HMRC for 2026/27. That was the previous employee tax-relief mechanism; the £6 figure remains relevant to qualifying employer reimbursements, not a new current-year HMRC deduction.

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