Need to know: 300,000 home workers to lose tax relief in April shake-up

• Approximately 300,000 UK home workers will lose their annual tax relief allowance from April 6, dealing a financial blow to remote employees across Britain.
• The scrapping of this long-standing measure will save HMRC £115 million over five years, according to research by accountancy firm Azets. Basic rate taxpayers face a £62 annual tax increase, while higher rate taxpayers will see bills rise by £124.
• Clair Williams, head of employment tax at Azets, warned the withdrawal could prove “a financial shock to numerous people” who claim relief on household expenses like heating and electricity. She said: “This tax relief, in place for many years, covers an estimated 300,000 people who incur additional household expenses.”
• The relief was expanded during the pandemic to help employees forced to work from home, allowing claims of up to £6 per week without receipts. Chancellor Rachel Reeves announced the scrapping in last year’s Autumn Budget, though Williams noted it “perhaps fell through the cracks of general awareness.”
• Employers can still reimburse staff for home working costs without tax implications, but Williams warned this shifts responsibility to the private sector. She cautioned: “Citing concerns about non-compliance, which is shorthand for fake claims, the government is moving the cost responsibility to the private sector.”
• Workers can still claim relief for the current tax year 2025-2026 and retrospectively for up to four previous years. The deadline for 2021-22 claims is April 5, 2026.
• Williams concluded the change “could well mean administrative headaches for businesses and a financial hit to WFH staff.”

READ THE FULL STORY: Reeves HMRC rule change means 300,000 in UK lose tax allowance from Monday