In the second in a series of articles on tax changes taking effect from 6 April 2026, this article focuses on changes affecting employees. Employees may also be interested in other articles in the series depending on their circumstances, including the article for employers. The changes explained in this article may also be of interest to employers.

Background: The legislative process

Both measures described in this article – the end of claims for tax relief for homeworking expenses and the changes affecting low-value benefits – were first announced at the Autumn Budget 2025. Legislation providing for the changes is included in the Finance Bill 2025-26. The Bill is currently making its way through Parliament and is subject to change. Learn more in ICAEW’s TAXguide 05/25.  

Homeworking expenses

For 2025/26, an employee who incurs additional household expenses as a result of working from home could be compensated for those costs in one of two ways: 

• The costs are reimbursed by the employer. The payment made by the employer is exempt from tax where the conditions in s316A, Income Tax (Earnings and Pensions) Act (ITEPA) 2003 are met. HMRC’s guidance on s316A begins at EIM01472.
• The employee makes a claim for tax relief. Where the conditions are met (s336, ITEPA 2003; EIM32810), the employee receives tax relief at their marginal rate of income tax. The claim can be made through pay as you earn (PAYE ) or on the self assessment (SA) tax return depending on the circumstances. The employee has the option of claiming relief:
  • for the actual expenses incurred; or
  • at a flat rate of £6 per week. Where the flat rate is claimed, the employee does not need to provide receipts. HMRC says that the “vast majority” of claims for homeworking expenses are for the flat rate. 

Employees will not be able to make a claim for tax relief for homeworking expenses for 2026/27 onwards. No changes are being made to the exemption for costs reimbursed by the employer.  

HMRC says that “this measure aims to address concerns around non-compliance and to ensure fairness across the tax system” as, “after checking claims, over half have been deemed to be ineligible for the relief, indicating high levels of non-compliance”. 

Further information 

• Removal of tax relief on non-reimbursed homeworking expenses - GOV.UK 

Workplace benefits relief 

For 2026/27:  

• new exemptions from tax will be provided for:
• the reimbursement of expenses relating to accommodation, supplies or services used in performing employment duties; and
• both the reimbursement and direct provision of flu vaccinations; and
• the existing exemption for eye tests and corrective appliances will be extended to cover reimbursements. 

HMRC says that this “measure promotes fairness and consistency in the treatment of minor employer-provided support” and aims to help “create a tax system that is streamlined and responsive to the needs of both employers and employees”.  

Further information 

• Expanding workplace benefits relief - GOV.UK