A key tax allowance presently being claimed by 300,000 UK households has been scrapped.
HMRC is scrapping a working from house allowance from Monday, April 6 (Picture: Getty)
HMRC is scrapping a key tax allowance value as much as £124 a 12 months for 300,000 UK households which began on Monday, April 6. As a part of the adjustments launched by authorities and utilized to HMRC from HM Treasury for the brand new tax 12 months, one allowance has been utterly abolished for the 2026-27 tax 12 months: the Working From Dwelling Allowance.
In accordance with the Chartered Institute of Taxation (CIOT), the federal government is ending Earnings Tax aid for individuals who do business from home and aren’t reimbursed by their employer to fulfill their prices.
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The allowance, which was launched throughout Covid lockdowns, gave employees £6 every week tax aid, which might be value £62 a 12 months for a fundamental price taxpayer incomes lower than £50,270 and £124 a 12 months for the next price taxpayer incomes greater than £50,270 a 12 months.
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Nevertheless, funds made to cowl working from house bills to staff proceed to be tax-free.
The CIOT explains: “From 6 April 2026, the federal government will discontinue the earnings tax aid out there to people who do business from home and aren’t reimbursed by their employer for the extra family prices of doing so.
“Beforehand, the usual flat-rate declare was £6 per week, leading to an annual tax saving of roughly £62 for fundamental price taxpayers (£124 for larger price taxpayers).
“Round 300,000 individuals presently obtain tax aid for homeworking prices, down from practically 3 million on the pandemic peak. (Funds by employers to staff to reimburse the identical bills proceed to be freed from tax and NICs.)”
Different tax adjustments launched by HMRC embrace a rise in dividend taxes which can value the typical small enterprise proprietor an additional £600 a 12 months in tax, and an unpopular change to Inheritance Tax for farmers which can introduce a 20% Inheritance Tax cost on the worth of any farm property belongings above a £2.5m threshold.
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