Rachel Reeves has scrapped the work-from-home tax relief in her Autumn Budget, in a move critics call “a further slap in the face for workers”.

From April 2026, employees will no longer be able to claim the £6 tax relief for home-working expenses – even if they are required to work remotely because their employer has no office or because they need specific adaptations. Currently, eligible employees can claim either a flat rate of £6 per week or the actual additional costs incurred, with the option to backdate claims for up to four tax years. HM Revenue and Customs (HMRC) estimates that around 300,000 people will be affected by the change, resulting in a tax increase of £62 for basic rate taxpayers and £124 for higher rate taxpayers.

Employers can still reimburse employees for these costs where eligible without deducting income tax and National Insurance contributions.

If you have never claimed but were required to work from home in recent years, you may still be able to claim for the current and up to four previous tax years.

A statement from HMRC reads: “This measure aims to address concerns around non-compliance and to ensure fairness across the tax system. After checking claims, over half have been deemed to be ineligible for the relief, indicating high levels of non-compliance.”

However, Kate Underwood, founder of Southampton-based Kate Underwood HR and Training, argues the move will hit workers who don’t have an office to go to.

She said: “They are already paying extra to heat the house and run the kit. That simple £6 a week was one of the few nods that working from home is not free. Now it becomes ‘prove every penny’ and hope HMRC agrees.

“For small businesses, it is yet another quiet job dumped on your lap. You either pick up some of the cost, drown in receipts, or risk losing good people who simply cannot afford to work from home anymore.

“If you or your team have been required to work from home and have never claimed, talk to your accountant now and consider backdating what you can. Then get clear on who is genuinely home-based, what you will cover after 2026 and build it into pay and policy.”

Colette Mason, author and AI consultant at London-based Clever Clogs AI, said the move was “spectacularly short-sighted”.

She continued: “If the goal of this Treasury change was genuinely to save a few pennies or to push workers back into city centre offices, it is spectacularly short-sighted.

“By layering complexity and administration onto small firms, the very firms that drive employment growth, Westminster is pushing the economic tipping point towards replacing people with software.

“The small amount the Treasury saves by scrapping this relief will be dwarfed by the long-term loss of revenue from wages and payroll taxes as businesses automate office jobs they can no longer justify retaining due to bureaucratic friction.

“This isn’t clever accountancy; it’s yet another instance of Labour’s self-sabotage of the working population.”

Samuel Mather-Holgate, an independent financial adviser at Swindon-based Mather and Murray Financial, said the Government needs to reconsider the change.

He added: “The flat rate £6 per week was seldom claimed by homeworkers, and due to the modest relief, it’s no wonder it was an easy revision for the Government to make. For fairness, there should be a carve-out for disabled people unable to work in the office, and the Government should look again at this cohort.

“The massive increase in the minimum wage will make up for the cutting of this relief and then some, in those on lower pay. Reviewing the system, this is something that employers should factor into their overall proposition so it’s no surprise the government wants rid of subsidising the private sector.”

David Stirling, independent financial adviser at Belfast-based Mint Wealth Ltd, said it was another hit for workers in a Budget that was already harsh.

He continued: “This is a further slap in the face for workers. From April 2026, HMRC is axing the simple £6 per week homeworking tax relief to be replaced by actual, evidenced costs.

“Homeworkers will now need to provide receipts, face extra admin and the delightful task of proving they boiled the kettle. Remote workers, consider yourselves quietly squeezed by the Chancellor.”