Homeworking Tax Relief Ends on 6th April for UK Workers

Thousands in Cornwall Face Homeworking Tax Hit From 6th April

People working from home in Cornwall are set to lose a long-standing tax relief from Monday 6th April, with some facing an annual financial hit of up to £124.

The change affects employees who incur additional household costs while working from home, where those costs are not reimbursed by their employer.

What’s Changing From April 6th

Research by Azets, a UK top 10 accountancy and business advisory firm with an office in Truro, highlights that around 300,000 homeworkers across the UK currently claim this relief.

The tax break has allowed eligible workers to claim up to £6 a week to cover extra costs such as heating, electricity and business phone calls, without needing to provide receipts to HMRC.

From the new tax year starting on 6th April, this relief will be removed.

Financial Impact on Workers

According to Azets, the change means:

• Basic rate taxpayers could see an increase of £62 a year
• Higher rate taxpayers could face a £124 increase

Clair Williams, Head of Employment Tax at Azets, explained:

“This tax relief, in place for many years, covers an estimated 300,000 people who incur additional household expenses, such as heating, electricity and business phone calls, in their employment duties.

“Claimants currently receive tax relief on up to £6 a week, and receipts are not required by HMRC.

“Removal of this tax relief will mean basic rate taxpayers see a tax increase of £62, and, at the higher rate, £124.

“However, employers can still reimburse employees for these costs, if eligible, without deducting income tax and National Insurance contributions.”

📷RESEARCH: Clair Williams, Head of Employment Tax at Azets, the top 10 UK accountancy and advisory firm.

Pressure on Employers

The removal of the relief could shift responsibility onto employers, particularly where staff work remotely and have no physical workplace.

Clair added:

“Citing concerns about non-compliance, which is shorthand for fake claims, the government is moving the cost responsibility to the private sector, where the business tax burden this year, at 32%, is already the highest in 28 years.

“It is also worth bearing in mind that local employers may come under pressure to change their policies on reimbursement to provide WFH staff with financial reassurance, and some staff don’t have workplaces to go to because their employer doesn’t actually have physical premises.

“Getting rid of the measure will, based on HMRC’s own calculations, save the Treasury £115 million over five years from introduction.”

Claims Still Open For Previous Years

Although the relief is ending, workers can still claim for the current 2025 to 2026 tax year and backdate claims for up to four previous tax years.

The deadline for claiming for the 2021 to 2022 tax year is 5th April 2026.

Clair said:

“With so many policy announcements made then, this one perhaps fell through the cracks of general awareness.”

Wider Tax Implications

The change comes alongside the ongoing freeze in tax bands, which could push some workers into higher tax brackets.

Clair warned:

“Whilst the abolition of home working tax relief spells good news for the nation’s coffers, it could well mean administrative headaches for businesses and a financial hit to WFH staff.”

The measure was first announced in the Autumn Budget last year, with HMRC estimating it will save £115 million over five years.