Abolition of Working from Home Tax Relief: Key Changes
The UK government is abolishing working from home tax relief on 6 April 2026. For the final 2025/26 tax year, eligible employees can still claim either a £6 weekly flat rate or their actual documented costs to reduce their annual taxable income.
Working from home tax relief allows eligible employees to claim tax relief on additional household expenses incurred while working from home. Eligible taxpayers save money because HMRC reduces their overall taxable income by either a flat rate of £6 per week or the exact amount of their documented business expenses. This relief constitutes a deduction from your taxable earnings rather than a direct cash payment from the government.
Key takeaways: The phase-out of homeworking tax relief
To help you understand the major changes and conditions quickly, here is a summary of the current Rules and the phase-out timeline:
- Flat rate vs actuals: Employees can claim £6 a week without receipts or claim their actual costs by providing full documentary evidence of household expenses.
- Strict eligibility restrictions: Relief is only available if your employer has no physical office or if your job contractually requires you to live far away.
- Abolition date: HMRC will completely abolish working from home tax relief on non-reimbursed expenses from 6 April 2026.
- Historical backdating limits: You can claim retroactively for up to four previous tax years, meaning claims for the 2021/22 tax year must be submitted before 5 April 2026.
What is working from home tax relief?
Working from home tax relief is an HMRC-administered tax relief scheme developed under UK tax legislation to support employees who are required to work from their homes. It operates by reducing an employee's total taxable income by a set weekly allowance or by the actual business expenditure incurred. This reduction lowers the amount of income tax owed to HMRC based on the taxpayer's marginal tax rate.
How much working from home tax relief can I claim for 2025/26?
For the 2025/26 tax year, you can choose between two methods to claim homeworking relief based on your circumstances and paperwork.
| Claim Method | Amount/Requirement | Evidence Required |
|---|---|---|
| Flat-rate method | £6 per week (£312 for the full year) | None (No receipts or bills required) |
| Actual costs method | The exact amount spent on business-only household costs | Full evidence (Receipts, bills, and calculations) |
The actual cash savings you receive depend directly on your marginal tax band. Below is a breakdown of how the £6 per week flat rate reduces your tax bill over a full tax year.
| Taxpayer Rate Scheme | Annual Taxable Income Reduction | Actual Annual Cash Saving |
|---|---|---|
| Basic Rate Taxpayer (20%) | £312.00 | £62.40 |
| Higher Rate Taxpayer (40%) | £312.00 | £124.80 |
Who is eligible for working from home tax relief in 2025/26?
To claim homeworking tax relief in 2025/26, you must meet the strict legal criteria enforced by HMRC regarding forced home working.
- Mandatory requirement: You must be contractually required to work from home, meaning your employer has no physical office space available for you.
- Geographical location: Your job requires you to live far from your collective employer office, making a daily commute impossible.
- No personal choice: You are ineligible to claim if you simply choose to work from home, even if your office is occasionally busy or your contract allows hybrid options.
- Self-employed differences: Self-employed individuals do not use this employee scheme. They instead claim business expenses through HMRC's simplified expenses system or actual home running costs on their Self Assessment.
What expenses can you claim for when working from home?
You can only claim relief on additional costs that are directly and exclusively linked to performing your job duties at home.
| Deductible Expenses | Non-Deductible Expenses |
|---|---|
| Additional gas and electricity for your workspace | Rent, mortgage interest, or council tax |
| Business-only telephone calls | Broadband internet connection packages |
| Water metered charges used directly during work hours | General home contents insurance or maintenance costs |
How to claim working from home tax relief
Claiming your tax relief is a straightforward process, but you must select the correct pathway based on how you pay tax.
- Check eligibility: Ensure you are contractually required to work from home and did not choose hybrid working voluntarily.
- Log in to the P87 portal: Go to the official HMRC online portal if you are a Pay As You Earn (PAYE) employee to adjust tax codes dynamically.
- Complete the P87 claim form: Fill out your workplace details, the tax year of the claim, and your chosen deduction method.
- Use Self Assessment: If you file tax returns annually, enter your homeworking allowance details directly into your Self Assessment tax return before the 31 January 2027 deadline.
What are the working from home tax relief changes for April 2026?
HMRC will completely abolish the non-reimbursed working from home tax relief starting from 6 April 2026. This legislative change means employees will no longer be allowed to deduct homeworking expenses from their taxable income, regardless of mandatory contract demands.
From the start of the 2026/27 tax year, the only way to receive tax-free cover for homeworking costs is through voluntary employer reimbursement. Under HMRC guidelines, payments directly reimbursed by your employer to cover additional homeworking costs will remain completely free from income tax and National Insurance.
How do I make a backdated working from home tax relief claim?
You can make a backdated claim for up to four previous tax years if you met the eligibility requirements during those periods.
| Eligible Tax Year | HMRC Claim Deadline | Maximum Flat-Rate Claim Value |
|---|---|---|
| 2021/22 tax year | 5 April 2026 | £312.00 (taxable reduction) |
| 2022/23 tax year | 5 April 2027 | £312.00 (taxable reduction) |
| 2023/24 tax year | 5 April 2028 | £312.00 (taxable reduction) |
| 2024/25 tax year | 5 April 2029 | £312.00 (taxable reduction) |
Can I still claim working from home tax relief for previous tax years?
Yes, you can claim tax relief retroactively for up to four previous tax years. You must submit your claim for the earliest year (2021/22) by the statutory deadline of 5 April 2026.
What happens if my employer voluntarily pays my homeworking expenses?
If your employer voluntarily pays or reimburses your homeworking costs directly, these payments are completely exempt from income tax and National Insurance. However, you cannot claim additional HMRC tax relief on top of this tax-free reimbursement.
Does working from home tax relief apply to self-employed individuals in the same way?
No, it does not. Self-employed individuals must calculate their home office deductions using actual business cost apportionment or the HMRC simplified expenses flat-rate scheme rather than the employee-only P87 scheme.
How does the working from home tax relief calculator determine my savings?
HMRC multiplies your claim amount (£6 per week or your actual eligible expenses) by your highest income tax rate. For example, a £312 eligible annual claim at a 20% basic tax rate equates to a £62.40 reduction in actual tax payable.
Can I claim if I split my time between the office and home?
No, you cannot claim if you split your time voluntarily. Under HMRC rules, hybrid workers who choose to split their working hours between home and an office that is available to them are not eligible to claim this relief.