Working From Home Tax Relief 2026/27: What Ended and What Remains

What changed on 6 April 2026

Employees can no longer claim tax relief for working from home. Section 360B of the Income Tax (Earnings and Pensions) Act 2003, inserted by Finance Act 2026 section 21, says: "No deduction from earnings is allowed under this Chapter for additional household expenses which the employee incurs in the performance of the duties of the employment at home." It has effect for 2026/27 and later tax years (legislation.gov.uk). HMRC's manual confirms that "from 6 April 2026 onwards, a deduction from earnings is no longer permitted for an employee's additional household expenses" (EIM32759).

Before that date, employees who were required to work from home could deduct the additional household costs under section 336 ITEPA 2003, either £6 a week or the exact extra amount. Choosing to work from home, including under a hybrid contract, never qualified (EIM32760). From 2026/27 the deduction is gone for everyone, including employees whose employer has no office.

What is not affected, per EIM32759: employer homeworking payments under section 316A (below), and travel expenses under section 337, where some travel from home to another workplace may still qualify. Self-employed people are also unaffected, because their use-of-home deduction is a trading rule, not a deduction from employment earnings.

Employer homeworking allowance: still tax-free

Your employer can pay you to cover reasonable additional household costs of working at home, and the payment is exempt from Income Tax under section 316A ITEPA 2003. HMRC says this exemption "continues to apply" (EIM32759).

• Guideline rate: £6 a week, or £26 a month for monthly-paid employees, from 6 April 2020. At this rate the employer does not have to justify the amount and you do not have to keep records (EIM01476).
• Not a maximum: more can be paid if the employer provides evidence to justify it, through an agreed scale rate or by reimbursing actual costs (EIM01476).
• Homeworking arrangements: there must be arrangements between you and your employer, and you must work at home regularly under them. They need not be in writing and can be hybrid: HMRC's example of 3 days on the employer's premises and 2 at home counts as regular. Informally taking work home in the evenings does not (EIM01472).

The exemption only covers what your employer pays. It does not let you deduct unreimbursed costs (EIM01472). If your employer pays nothing, there is no working-from-home claim to make to HMRC for 2026/27; the only option is to ask your employer about a homeworking payment.

Claims for earlier tax years

Section 360B applies from 2026/27. GOV.UK says "You can still claim for the 4 previous tax years" (GOV.UK), and the statutory limit is 4 years after the end of the tax year the claim relates to (TMA 1970 s.43). During 2026/27 the open years are 2022/23, 2023/24, 2024/25 and 2025/26. The 2022/23 year closes on 5 April 2027.

Those years use the old test. GOV.UK says you could claim if you had to work from home, for example because your job requires you to live far away from your office or your employer does not have an office. You cannot claim if you chose to work from home, including where your employment contract lets you work from home some or all of the time, or where the office is sometimes full. HMRC's full conditions are in EIM32760.

For a qualifying year you claim relief on either £6 a week or the exact amount you spent, at your tax rate. GOV.UK's example: a 20% basic-rate taxpayer gets £1.20 a week in relief on £6 a week. For £6-a-week claims for 2022/23 or later you must send evidence that you had to work from home; exact-amount claims also need receipts or bills. You cannot claim for things with both private and business use, such as rent or broadband access, and you cannot claim for costs your employer paid back.

How to claim an earlier year

• Online: through the service linked from GOV.UK's working-from-home page.
• By post on form P87: if your total job-expenses claim for the year is £2,500 or less and the claim is within 4 years from the end of that tax year. HMRC rejects postal claims that do not use form P87 (GOV.UK P87 guidance).
• Self Assessment: if you complete a return you must claim through it instead, and a claim above £2,500 for a year requires a return.

For previous tax years HMRC will either adjust your tax code or give you a refund (GOV.UK).

Self-employed simplified expenses

Section 360B does not apply to sole traders or partnerships of individuals. They can deduct the business proportion of actual home costs (BIM47820), or use the simplified-expenses flat rates, which apply only if you work 25 hours or more a month from home (GOV.UK; BIM75010):

The flat rates cover household running costs. Telephone and internet are not included and are claimed separately on their business proportion (GOV.UK). Limited companies cannot use simplified expenses, and a company director is an employee of the company, so section 360B applies to directors.

Related calculators and guides

• Salary calculator - PAYE take-home for any salary with pension salary sacrifice modelling.
• Self-employed calculator - sole-trader profit after expenses.
• UK tax relief guide - overview of the employment expense reliefs that remain available.
• Pension tax relief guide - relief at source vs net pay arrangement comparison.
• Mileage tax relief calculator - relief where employees use their own car for work.
• UK mileage allowance guide - HMRC Approved Mileage Allowance Payments (AMAP) scale rates.
• Flat rate expenses guide - uniform and tools relief, which continues in 2026/27.