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New restrictions on claiming additional allowances
Employees who are required to work from home to perform the duties of their employment are entitled to tax relief on their actual costs under section 336 ITEPA 2003.
Section 336 ITEPA allows for a deduction from earnings for allowable expenses that meet certain criteria that are set out within legislation.
From 6 April 2026, a new section 360B is introduced into Chapter 11 of Part 4 ITEPA 2003 to disallow a deduction from earnings for additional household expenses incurred in employment duties, where those expenses are not reimbursed by the employer. The measure uses the same definition of ‘household expenses’ as defined in s316 ITEPA 2003.
This measure will mean additional household expenses will no longer qualify for deduction from earnings.
This measure does not affect the eligible employees who can claim a flat rate of £6 a week since tax year 2020/21.
More details can be found within the policy paper.