Key takeaways
- Tax relief for an employee's additional household costs was removed from 6 April 2026. Employees cannot claim the £6 per week flat rate, or actual costs, for 2026/27 onwards.
- You can still backdate a claim for up to four earlier tax years if you were required to work from home in those years and have not already claimed.
- Self-employed people are unaffected and can still use HMRC simplified expenses of £10, £18 or £26 per month depending on whether they work 25-50, 51-100 or 101-plus hours from home.
- Employers can still pay employees up to £6 per week tax-free for additional home-working costs without supporting evidence. That exemption is unchanged.
- For a limited company director, the company paying the £6 per week is now the only live route, because the employee's own claim has gone.
Tax Relief Working at Home
The way we work has transformed significantly over the past few years, with remote work becoming the new norm for many. When you run your own limited company or operate as a sole trader, using a home office becomes a common practice. As a UK contractor, limited company owner, or small business owner, you might work from home occasionally or even regularly, due to which, your expenses often increase due to the extra use of electricity and the internet.
Understanding the tax relief for home workers is crucial, because the rules changed significantly on 6 April 2026. Who can claim now depends on whether you are employed, self-employed, or a director drawing the allowance through your own company. This guide separates the three.
In this guide, we will explain everything you need to know about working from home tax relief and how to make the most of the tax relief available to you as a remote home worker. Whether you're new to working from home or have been doing it for years, this guide will help you understand the tax implications and keep more of your hard-earned money in your pocket.
Changed on 6 April 2026: employees can no longer claim tax relief for the additional household costs of working from home. Both the £6 a week flat rate and the actual-cost method ended. Three things survive and this guide flags which applies to you: a backdated claim for up to four earlier tax years, self-employed simplified expenses, and an employer reimbursing up to £6 a week tax-free.— HMRC EIM32759 and the Finance Bill measure removing the relief
What is Working from Home (WFH) Tax Relief?
Working from home tax relief allows self-employed individuals and contractors to claim back some of the expenses they incur wholly for the business use while working remotely. These expenses include costs for:
- Heating
- Electricity
- Business phone calls
- Gas
- Water
- Broadband
- Office supplies
- Business equipment repairs
- Cleaning
Essentially, tax relief helps to reduce the amount of tax you owe, giving you some financial relief for the extra costs you bear while working from home.
For self-employed individuals, you can claim a portion of your home expenses, such as utilities, mortgage interest, and even rent, based on the space and time you use for work.
Limited company owners can also benefit by having their company reimburse them for home office expenses, ensuring these are deducted from the company's taxable profits.
Contractors operating through a limited company or as self-employed can take advantage of similar reliefs, ensuring that the costs of working from home do not impact their personal finances negatively.
Importance of Claiming Tax Relief Working at Home
Let’s understand why it is important to claim tax relief:
- Maximising Take-Home Pay: Claiming tax relief allows you to deduct a portion of your home expenses from your income tax, which can increase your take-home pay. This means you keep more of what you earn.
- Covered Costs: You can claim back costs such as heating, electricity, internet, and rent or mortgage interest. These are necessary expenses for running your business from home, and tax relief ensures you're not bearing these costs alone.
- Increased Disposable Income: By reducing the amount of tax you owe, tax relief increases your disposable income. This extra cash can be reinvested into your business or used to cover other essential expenses.
- Legal Entitlement: Tax relief for home workers is a legal entitlement. By claiming it, you ensure you're taking full advantage of the benefits available to you under the law.
Benefits of Claiming WFH Tax Rebate
- Reduced Financial Burden: Tax relief can significantly reduce the financial burden of increased home expenses and help manage your household budget.
- Savings on Essential Costs: By claiming relief on specific work-related expenses, you can save money on essential costs.
- Investment in Growth: The money saved through tax relief can be reinvested into your business. Whether it’s upgrading equipment, marketing, or professional development, these investments can help grow your business.
- Simplified Tax Filing: The availability of a standard allowance, like the £6 per week flat rate, simplifies the process of claiming tax relief. This makes it easier for self-employed individuals to file their tax returns accurately and efficiently.
What to Consider for Use of Home as Office Allowance 2026/27
If you run a limited company, you can claim home office expenses as part of your business costs. HMRC refers to this as the "use of home office allowance. For limited company owners, you can claim tax relief for working from home through your business. If you are self-employed, you can claim this relief on your tax return. If you are an employee whose employer does not reimburse you for working from home, you can still claim the use of home tax allowance on your tax return.
Here are key points to remember when claiming for using your home as an office:
- If you are self-employed, you will save on basic or higher rate tax and national insurance.
- If you are claiming for home office use as a limited company, the cost will save Corporation Tax.
Who Could Claim, and Who Can Still Backdate
For 2026/27 onwards employees cannot claim this relief at all. The conditions below are the ones that applied up to 5 April 2026, and they still matter if you are backdating a claim for an earlier tax year. You qualified if you had to work from home because:
- Your work requires you to live far away from your office.
- You or your employer doesn’t have a business office.
- Your employer has not already paid your expenses and you have additional household costs as a result of working from home
- Your employer's premises do not have the necessary facilities for you to do your job.
- Your job requires you to travel an unreasonable distance to and from your employer's premises every day.
- Government restrictions require you to work from home.
Example Scenario: John’s employer does not have an office, so he must work from home to perform his duties. He incurs additional broadband costs to handle his work responsibilities. Since there is no office provided by his employer, John is eligible to claim tax relief.
Who Could Not Claim, Even Before the Relief Ended
Even before the relief ended you could not claim if you chose to work from home. These exclusions still apply to a backdated claim for an earlier year:
- Your employment contract allows you to work from home some or all of the time, but it is not a requirement.
- You work from home due to the coronavirus (COVID-19) pandemic.
- Your employer has an office, but you cannot go there sometimes because it’s full.
Example Scenario: Emily’s contract allows her to work from home two days a week. She incurs additional heating costs on those days. Because Emily chooses to work from home and it is not a requirement, she does not qualify for working from home tax relief.
How to Calculate Your Tax Relief
Ways to Calculate Your Working from Home Expenses
1. HMRC's Guideline Allowance
- Without any need for justification, you could claim £6 per week for the use of your home for business purposes. That applied from 6 April 2020 to 5 April 2026, when the employee relief ended. An employer can still pay the same £6 a week tax-free, which is now the only live route.
- This flat rate is straightforward and requires no evidence of additional costs, making it easy to claim. Over a year, this adds up to just over £300, which is designed to cover basic administrative tasks completed from home.
2. Usage Calculation for Higher Claims
- If you work from home extensively, you might incur higher costs than the HMRC’s flat rate covers. In such cases, you can claim more by providing evidence like receipts, bills, or contracts.
- To calculate the exact amount of extra costs incurred above the weekly flat rate, use the following formula:
(B + (D% x C) / A) x E
Where:
- A = Total number of rooms in your home.
- B = Number of rooms dedicated solely to business use.
- C = Number of rooms used partly for business and partly for personal use.
- D = Percentage of time the rooms are used for business compared to personal use.
- E = Total home expenditures (e.g., water and sewerage, heating, lighting).
Example Calculation
Let’s say you have a home with 5 rooms. You use 1 room exclusively for business and another room for both business and personal use, with business use occupying 50% of the time. Your total home expenditures, including water, heating, lighting, internet, amount to £2,000 for the year.
Using the formula:
A (Total number of rooms in your home) = 5
B (Number of rooms dedicated solely to business use) = 1
C (Number of rooms used partly for business and partly for personal use) = 1
D (Percentage of time the rooms are used for business compared to personal use) = 50%
E (Total home expenditures) = £2,000
(1 + ((50% + 1) / 5)) X £2,000 = £2,200
In this example, you can claim £2,200 for using your home for business purposes, provided you have the necessary evidence to support your claim.
Types of Expenses That Can Be Included (E)
- Water rates
- Light and heating costs
- Telephone line rental, internet, and cost of calls
- Business equipment repairs
- Cleaning services
3. HRMC’s Simplified Expenses: You can use HMRC’s simplified expenses option to claim a working from home tax rebate if you meet the following criteria:
- You are self-employed.
- You work from home for at least 25 hours a month.
You can calculate your allowable expenses using a flat rate based on the hours you work from home each month. This method simplifies the process by eliminating the need to separate personal and business use of your home expenses
These rates apply specifically to self-employed individuals and not to limited company directors. You can claim the following rates based on your monthly work hours.
Tax Relief Based on Your Tax Rate
You’ll receive tax relief based on the rate at which you pay tax. For example, if you are a basic rate taxpayer (20%), you will save 20% of your allowable expenses.
Working from Home Tax Relief Calculator
Calculating your working from home tax relief has never been easier. Use our Working from Home Tax Relief Calculator below to quickly and accurately determine the amount of tax relief you can claim. This tool simplifies the process, helping you maximise your claim without the hassle of manual calculations.
How to Claim for an Earlier Tax Year
- Claiming Online: Go to the government website to claim tax relief for your job expenses, answer work related questions, login using your Government gateway ID (Create one if you don’t have one), enter the start date and claim.
- Claiming Through Self-Assessment: If your expenses are more than £2,500 in some of the tax years you are claiming for, you must claim them as part of a Self Assessment tax return.
How is working from home tax relief paid?
1. Tax Rebate for Previous Tax Years
If you are eligible for a working from home tax rebate for previous tax years, HMRC will typically issue a cheque for the amount owed. This is a straightforward process where HMRC refunds the excess tax you have paid in prior years due to your working from home expenses.
2. The Current Tax Year
There is nothing to claim for 2026/27. The relief ended on 6 April 2026, so HMRC will not adjust your tax code for home-working costs in the current year. If your employer reimburses you up to £6 a week for additional household costs, that payment is tax-free and needs no claim from you.
Claim Your Work from Home Tax Relief Today!
Working from home tax relief is a valuable benefit that can help offset the extra costs incurred when working from home. If you are eligible, don’t miss out on claiming this tax relief.
If you’re unsure about how to claim, eligibility criteria or what expenses you can claim, consult our contractor accountants today! Start maximising your working from home tax relief today to take full advantage of the benefits available to you!
