You can currently claim tax relief for extra household costs associated with working from home, such as energy or broadband, if your place of work does not have an office for you to work in
Young adult man working from home(Image: Getty)
Millions of people who are forced to work from home will no longer be able to claim tax relief from April 2026.
You can currently claim tax relief from HMRC for extra household costs associated with working from home, such as energy or broadband, if your place of work does not have an office for you to work in.
The work from home allowance in the UK is a flat rate of £6 per week. You do not qualify for work from home tax relief if you choose to work from home.
This was different during the coronavirus, when anyone who worked from home for even one day during the pandemic qualified for tax relief.
The rules changed in 2022 so that you can’t claim tax relief if you choose to work from home for part of the week because your employer offers hybrid working.
Chancellor Rachel Reeves confirmed in her Budget 2025 that she was axing the work from home tax relief for all workers from this April.
But employers will still be allowed to give staff money towards working from home costs without being taxed. In more tax updates, the Chancellor also revealed she will extend the freeze on tax thresholds for another three years.
The income tax personal allowance – set at £12,570 – was meant to be frozen until April 2028 but they will now be frozen until the end of the 2030/31 financial year.
The freezing of tax brackets is known as fiscal drag, as more people are dragged into higher tax brackets over time when their wages increase.
It is also described as a stealth tax, as it is a way for the government to collect more tax without actually putting up the rate of tax that people are paying.
The Office for Budget Responsibility (OBR) estimates the freeze in tax thresholds would result in 780,000 more basic-rate, 920,000 more higher-rate and 4,000 more additional-rate income tax payers in 2029/30.
The personal allowance is how much most people can earn before they start to pay tax. When you earn above this amount, you pay the basic 20% rate of income tax.
The higher 40% rate applies on earnings above £50,270, while the additional 45% rate kicks in when you start to earn more than £125,140.
The threshold for when you start paying National Insurance is also set at £12,570. You pay 8% in National Insurance contributions when you start to earn £12,570, then 2% on earnings over £50,270.
