Working from Home Tax Relief Scrapped from April 2026

What Is Changing

From 6 April 2026, HMRC is removing the flat-rate working from home tax relief that employees have been able to claim through Self Assessment or a P87 form. This was worth £6 per week (£312 per year) and could be claimed without providing any evidence of actual costs.

The relief was originally designed for employees who had no choice but to work from home. It surged in popularity during the pandemic and never quite went away, even as most people returned to offices or adopted hybrid arrangements. HMRC has now decided to end it entirely.

Who Is Affected

This change hits anyone who currently claims working from home relief as an employee, including:

Director-employees claiming through Self Assessment
Employees who claimed via HMRC's online portal or P87
Hybrid workers who claimed for days worked at home

If you are a sole director of your own limited company and you have been claiming the £6/week relief on your personal tax return, that option disappears from April 2026.

What the Relief Was Worth

The flat-rate relief worked like this:

Item	Amount
Weekly allowance	£6
Annual total	£312
Tax saving at 20%	£62.40
Tax saving at 40%	£124.80

It was modest, but it required zero paperwork. You ticked a box, HMRC adjusted your tax code, and you received the benefit automatically. That simplicity is what made it popular.

What Directors Can Still Claim

Here is the critical distinction most articles miss: the employment relief is gone, but company expense claims for home office use are completely unaffected.

As a director of a limited company, you have two separate routes for claiming home costs. The one being scrapped (employment relief via Self Assessment) was always the less valuable option. The better route — claiming through your company — remains fully available.

Route 1: Flat Rate Through Your Company (Still Available)

Your company can pay you a flat rate of £6 per week (£26 per month) for use of your home as an office, without any supporting evidence needed. This is exactly the same amount as the old employment relief, but it works differently:

The company pays you £26/month as an expense reimbursement
The payment is tax-free for you (no income tax or NI)
The company claims it as a deductible business expense (saving 25% corporation tax)
No receipts or calculations required

This is permitted under HMRC's rules for employer payments to employees who work from home. It is a separate provision from the employment relief being scrapped and it is not changing.

Route 2: Actual Cost Method (Still Available)

If your actual home office costs exceed £6/week, your company can reimburse you for a proportion of your household bills based on business use. This requires evidence but can be worth significantly more.

Claimable costs include:

Heating and electricity — proportion based on rooms used and hours worked
Council tax — same proportional basis
Home insurance — same proportional basis
Broadband — business use proportion
Mortgage interest or rent — proportion of the rooms used (note: this can create a capital gains tax issue on sale — take advice)
Water rates — if metered, a proportion may be claimed

Example Calculation

A director works from a dedicated home office (1 of 5 rooms), 5 days per week:

Expense	Annual Cost	Business Proportion (20%)	Claimable
Electricity and gas	£2,400	20%	£480
Council tax	£2,000	20%	£400
Broadband	£480	50% (shared use)	£240
Home insurance	£360	20%	£72
Total			£1,192

At 25% corporation tax, the company saves £298 on this claim. And you receive £1,192 tax-free, compared to £312 from the old flat-rate employment relief.

The actual cost method was always the better option for directors. The removal of the employment relief simply removes the inferior alternative.

What You Cannot Claim

Some costs are never allowable regardless of which route you use:

Food and drink consumed at home
Clothing (unless specialist protective equipment)
Furniture for non-work areas
General household maintenance not related to the office space
Mortgage capital repayments (only interest may be claimed, and with caution)

The Difference Explained Simply

	Employment Relief (Scrapped)	Company Expense (Still Available)
Who claims	You, on Self Assessment	Your company, as a business expense
Tax benefit	Reduces your income tax	Reduces company corporation tax + tax-free payment to you
Evidence needed	None (flat rate)	None for £6/week; receipts for actual costs
Amount	£312/year max	£312/year flat or potentially £1,000+ actual
Status from April 2026	Removed	Unchanged

Key Dates

6 April 2026 — Employment working from home relief ends
2026/27 tax year — First full year without the relief on Self Assessment
31 January 2028 — Final Self Assessment deadline where 2025/26 WFH claims can be made

What to Do Now

Stop claiming on Self Assessment — From 2026/27, the box for working from home relief will no longer be available.
Set up company reimbursement — If you work from home, have your company pay you £26/month as a home office allowance. This replaces the employment relief with an equivalent (or better) benefit.
Consider the actual cost method — If you have a dedicated office space and your bills are significant, calculate the actual proportion. It is almost always worth more than £6/week.
Keep records — For the actual cost method, retain utility bills and document your calculation of the business proportion.

AccountsOS tracks your home office expenses and calculates the claimable proportion automatically, ensuring you claim the full amount through your company without the paperwork.

Frequently Asked Questions

Can my company still pay me £6/week for working from home after April 2026?

Yes. The change only removes the employment tax relief claimed through Self Assessment (or via a P87 form). Your company can still pay you £6/week (£26/month) as a tax-free expense reimbursement for working from home. This is a separate HMRC provision and is not affected by the April 2026 change.

Is the actual cost method better than the £6/week flat rate?

Almost always, yes. If you have a dedicated workspace and pay your own household bills, the actual cost method typically yields £800 to £1,500 per year in claimable expenses, compared to £312 from the flat rate. The trade-off is that you need to keep records and calculate the business proportion of each bill.

Will this affect hybrid workers who only work from home part of the week?

For employees (not directors), yes — they lose the ability to claim any flat-rate relief through HMRC from April 2026. For director-employees of their own company, the company can still reimburse home working costs proportionate to the days worked from home. You simply adjust the calculation to reflect actual usage.

Do I need a dedicated room to claim home office expenses through my company?

Not for the £6/week flat rate — your company can pay that regardless of your setup. For the actual cost method, HMRC expects you to have a clearly identifiable workspace. A dedicated room makes the calculation simpler and the claim more defensible, but a consistent workspace within a shared room can also qualify if you can demonstrate regular business use.