For millions of employees and directors, the "Working From Home" (WFH) tax relief has been a small but reliable perk since the pandemic. Whether you claimed the flat rate of £6 per week or calculated your actual additional household costs, it was a simple way to offset the rise in utility bills.

However, from 6 April 2026, the rules are changing significantly. The government has officially abolished the ability for employees to claim this tax deduction directly from HMRC. At CoreAcc Accountants, we want to ensure both employers and staff understand what this means for their take-home pay and their expenses policies.

What exactly is being abolished?

Currently, if you are required to work from home, you can claim tax relief on £6 per week (£312 per year) without providing receipts. For a basic rate taxpayer, this is worth about £62 a year, and for higher rate taxpayers, it’s £124. From April 2026, this "freestanding" claim on your Self Assessment or via the HMRC portal will no longer be an option.

The "Two-Tier" Future: Reimbursement is Key

While the tax deduction for individuals is going away, the rules for employers remain the same. Employers can still choose to reimburse their employees for home-working costs up to £6 per week completely tax-free.

This creates a two-tier system:

● If your employer pays you a WFH allowance: You still get the benefit tax-free.

● If your employer does NOT pay an allowance: You can no longer "top up" your tax position by claiming it back from HMRC.

A Strategy for Business Owners and Directors

If you run your own limited company and work from home, the impact is slightly different. You can no longer make a personal claim on your tax return for the "home as office" allowance. To keep the benefit, your company must physically pay you the £6 per week (or a higher amount based on actual metered costs).

How CoreAcc Accountants Can Help

This change might seem small, but it's part of a broader trend of HMRC tightening the rules on employment expenses. We can help you by:

● Reviewing Expense Policies: We’ll help employers decide if they should start formally reimbursing staff to maintain morale.

● Director Remuneration: We will ensure your company-to-director payments are structured correctly so you don't lose out on this deduction.

● Contract Reviews: Tax-free reimbursements are only valid if an employee is contractually "required" to work from home. We can help you verify your team's status to avoid future HMRC challenges.

Get in Touch

Is your business ready to update its expenses policy for the 2026/27 tax year? Contact CoreAcc Accountants today to ensure your team stays supported.

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