Working From Home Tax Relief (2026-27): What You Can Claim

If you regularly work from home because your employer requires it, you can claim tax relief on the additional household costs you incur. For 2026-27, most people claim the flat-rate allowance of £6 per week (£312 a year), which saves a basic-rate taxpayer £62.40 or a higher-rate taxpayer £124.80 in actual tax. But there are strict rules: you must be contractually obliged to work from home, or your employer must have no suitable office space for you. The relaxed Covid-era rules that let anyone claim for occasional home working ended in April 2022. This guide explains who qualifies, how much you can claim, how to make your claim, and the common mistakes that trip people up.

Who qualifies for working from home tax relief?

Not everyone who works from home can claim. HMRC's position is clear: you qualify only if you must work from home to do your job, not simply because you choose to or because it's more convenient.

The two main qualifying scenarios

1. Your employer has no suitable office space for you
If your employer doesn't provide an office or desk you could reasonably use, you qualify. This often applies to field-based roles (sales reps, care workers, tradespeople) or employees of very small businesses with no physical premises.

2. You're contractually required to work from home
Your employment contract or a formal written agreement states you must work from home for all or part of your duties. A casual email saying "you can work from home on Fridays" doesn't count—it must be a requirement, not a permission.

What doesn't qualify

• Hybrid working by choice: If your employer offers office space but you prefer to work from home two or three days a week, you cannot claim. This is the biggest change from the Covid period.
• Occasional home working: Working from home now and then for convenience (to wait for a delivery, avoid a commute) doesn't qualify.
• Personal preference: Even if you're more productive at home, if you could work in the office, HMRC says no relief is due.

The Covid-era relaxation (April 2020 to April 2022) allowed claims if you worked from home for even one day due to pandemic restrictions. That temporary measure has ended. The rules are now back to the pre-2020 position [EIM01472].

How much can you claim?

You have two options: the flat-rate allowance or actual costs. Most people use the flat rate because it's simpler and doesn't require receipts.

Option 1: Flat-rate allowance (£6 per week)

For 2026-27, HMRC allows you to claim £6 per week (£312 per year) without providing any evidence of your actual costs. This is a tax relief, not a payment—it reduces your taxable income by £312.

What that means in real money:

• Basic-rate taxpayer (20%): You save £312 × 20% = £62.40 per year
• Higher-rate taxpayer (40%): You save £312 × 40% = £124.80 per year
• Additional-rate taxpayer (45%): You save £312 × 45% = £140.40 per year

The flat rate is available even if you work from home for just one day a week, as long as you meet the qualifying conditions. You don't need to prove your actual costs are £6 per week—HMRC accepts this as a reasonable estimate of additional household expenses.

Option 2: Claim actual costs

If your genuine additional costs exceed £6 per week, you can claim the actual amount instead. You'll need to:

• Keep records and receipts
• Calculate the business proportion of each expense
• Justify your calculations to HMRC if asked

What you can include:

• Heating and electricity for the hours you work at home
• Business phone calls (but not line rental unless you have a dedicated business line)
• Internet costs (but only the additional cost for business use—usually hard to prove)

What you cannot include:

• Rent or mortgage interest (unless you're self-employed and use a specific room exclusively for business)
• Council Tax
• Water rates
• Home insurance (unless you have specific business equipment cover)
• Tea, coffee, or meals
• Furniture or equipment your employer should provide

Example: Apportioning electricity costs
Marcus works from home three days a week, 8 hours a day. His annual electricity bill is £1,200. His home is occupied roughly 16 hours a day, 7 days a week = 112 hours. He works 24 hours per week from home. His business use is 24/112 = 21.4% of occupied hours. He might reasonably claim 21.4% × £1,200 = £257 per year. But this is less than the flat rate (£312), so he'd be better off claiming the flat rate.

In practice, unless you have very high heating bills or work from home full-time in a large, poorly insulated house, the flat rate is usually more generous and far less hassle.

How to make your claim

The process depends on whether you complete a Self Assessment tax return.

If you don't complete a Self Assessment return

Use HMRC's online service or form P87. You can claim for the current tax year and the previous four years in one go.

Online (easiest):
Go to GOV.UK and search "claim tax relief for your job expenses". You'll need your Government Gateway ID. The service walks you through the questions and adjusts your tax code for the current year, giving you the relief through your salary over the remaining months. For previous years, HMRC will send you a cheque or bank transfer.

By post:
Download form P87 from GOV.UK, complete it, and post it to HMRC. This takes longer—typically 8-12 weeks for processing.

If you complete a Self Assessment return

Include your working from home expenses in the "Employment" pages of your tax return, box 20 ("Other expenses and capital allowances"). Enter £312 if you're claiming the flat rate, or the actual amount if you're claiming real costs. You'll receive the relief as a reduction in your tax bill when you pay your Self Assessment.

Backdating your claim

You can backdate claims for up to four years. As of 2026-27, you can claim for:

• 2026-27 (current year)
• 2025-26
• 2024-25
• 2023-24
• 2022-23

Remember: for 2022-23, the Covid relaxation ended on 5 April 2022, so only the final few days of that tax year were under the strict rules. For 2020-21 and 2021-22, the relaxed rules applied, but those years are now outside the four-year window.

What if your employer already pays you a homeworking allowance?

Some employers pay a monthly or annual homeworking allowance to cover your costs. If your employer pays you:

Up to £6 per week (£26 per month / £312 per year):
This is tax-free. You don't pay tax on it, but you also can't claim tax relief on top—that would be double-dipping.

More than £6 per week:
The excess is taxable as earnings. For example, if your employer pays you £40 per month (£9.23 per week), the first £26 per month is tax-free, and the remaining £14 per month is added to your taxable pay.

Less than £6 per week:
You can claim tax relief on the difference. If your employer pays £15 per month (£3.46 per week), you can claim relief on £6 - £3.46 = £2.54 per week (£132 per year).

Your employer should handle this through payroll, but check your P60 or payslips. If you're unsure, ask your payroll department or claim through P87—HMRC will adjust for any allowance you've already received.

Common mistakes

1. Claiming when you choose to work from home
The most common error. If your employer has an office you could use, but you prefer to work from home, you don't qualify. HMRC may ask for evidence (your contract, a letter from your employer) and will reject claims that don't meet the "must work from home" test.

2. Claiming for the whole household's heating bill
If you claim actual costs, you must apportion fairly. You can't claim 100% of your energy bill because you work from home one day a week. HMRC expects reasonable calculations based on hours and rooms used.

3. Claiming for equipment your employer should provide
If your employer is required to provide a laptop, desk, or chair under health and safety rules, you can't claim tax relief for buying your own. The relief is for household costs (heat, light), not capital equipment.

4. Forgetting to claim for previous years
Many people claim only for the current year and miss out on backdated relief. If you qualified in 2023-24, 2024-25, and 2025-26, that's potentially three extra years of £62-£140 each.

5. Claiming the flat rate and actual costs
You must choose one or the other. You can't claim £6 per week flat rate plus your actual broadband bill. It's either/or.

6. Assuming the Covid rules still apply
They don't. If you last claimed in 2021 because you worked from home during lockdown, the rules have changed. Check you still qualify under the current, stricter criteria.

Example: Sarah's claim

Sarah is a customer service advisor. Her employer closed their office in 2025 and now requires all staff to work from home permanently. Sarah earns £32,000 a year (basic-rate taxpayer). Her employer pays her £20 per month (£4.62 per week) toward homeworking costs.

Sarah's calculation:

• Flat-rate allowance: £6 per week = £312 per year
• Employer already pays: £4.62 per week = £240 per year (tax-free)
• Sarah can claim relief on: £312 - £240 = £72 per year
• Tax saving: £72 × 20% = £14.40

Sarah also realises she qualified for the full year in 2025-26 and 2024-25. She claims for all three years:

• 2026-27: £14.40
• 2025-26: £14.40
• 2024-25: £14.40
• Total refund: £43.20

Not a fortune, but worth claiming for ten minutes' work online.

Example: James's claim

James is a software developer earning £65,000 (higher-rate taxpayer). His contract states he must work from home—his employer has no office. His employer pays nothing toward homeworking costs.

James's calculation:

• Flat-rate allowance: £312 per year
• Tax saving: £312 × 40% = £124.80 per year

James has worked from home since 2022. He claims for five years (2022-23 through 2026-27):

• 5 years × £124.80 = £624 total refund

James briefly considers claiming actual costs (his energy bill is high), but after calculating his business proportion, he'd only get about £280 per year—less than the flat rate—so he sticks with the simpler option.

What about self-employed people?

If you're self-employed, different rules apply. You can claim a proportion of your household costs as business expenses, including rent, mortgage interest, council tax, and utilities. The calculations are more complex, and you must keep detailed records. This guide covers employees only. Self-employed individuals should refer to HMRC's guidance on simplified expenses or consult an accountant.

What to do next

If you're certain you qualify:
Make your claim now. Use the online service at GOV.UK (search "claim tax relief for job expenses") or include it in your Self Assessment return. Don't forget to backdate for previous years if you qualified then too.

If you're unsure whether you qualify:
The key question is: does your employer require you to work from home, or do they simply allow it? Check your contract or ask your HR department for a written statement. If you're still uncertain, ask AI Tax a specific question about your situation—describe your working pattern and what your employer has told you.

If your situation is complicated:
Perhaps you work from home some days and the office others, your employer pays you a partial allowance, or you have high actual costs you want to claim. AI Accountant can review your circumstances, calculate the optimal claim, and handle the submission to HMRC for you, ensuring you get every pound you're entitled to without the risk of an incorrect claim.

Working from home tax relief is a small but worthwhile benefit if you qualify. The rules are stricter than they were during Covid, but if your employer genuinely requires you to work from home, claiming £62-£140 per year (and backdating for previous years) is straightforward and takes just a few minutes online.