A new rule means many UK workers will lose an HMRC allowance from Monday. About 300,000 home workers will lose their annual home working allowance from Monday, April 6.

Research by Azets says stopping this allowance will save £115 million over five years from April 2026.

The removal of tax relief on homeworking expenses could hurt many workers financially, says Clair Williams from Azets.

This tax relief helps 300,000 people with extra household costs like heating and electricity for work. They get tax relief on up to £6 a week without needing receipts. Claimants currently receive this relief.

Removing this relief means basic rate taxpayers will pay £62 more in tax and higher rate taxpayers will pay £124 more. However, employers can still pay back employees for these costs without taking income tax and National Insurance.

Clair Williams is the head of employment tax at Azets.

In 2020-2021 and 2021-2022, more employees could claim homeworking expenses because they had to work from home due to the pandemic.

Clair says the government is moving the cost to the private sector due to concerns about fake claims. The business tax burden is already the highest in 28 years at 32%.

Local employers might feel pressured to change their reimbursement policies to help staff working from home. The government will save £115 million over five years by stopping this measure.

The tax relief change was confirmed by Chancellor Rachel Reeves in the Autumn Budget last year.

Clair says this change might have been overlooked with all the other policy announcements.

Chancellor Rachel Reeves made this change.

About 300,000 people can still claim tax relief for the 2025-2026 tax year and up to four previous years, but not after this April. The deadline to claim for the 2021-2022 tax year is April 5, 2026.

Clair warns that some workers might be pushed into a higher tax bracket due to the tax band freeze.

The end of home working tax relief is good for the government but might cause problems for businesses and hurt workers financially.

Clair says this change could mean administrative issues for businesses and less money for workers.