EIM32815 | Other expenses: home: household expenses: expenses that are deductible: treatment prior to 6 April 2026

For the treatment of working from home expenses from 6 April 2026 onwards, please see EIM32759.

Section 336 ITEPA 2003

Tax years 2006-07 to 2025-26

This guidance only applies where an employee's home is a workplace, see EIM32760.

It is a condition for relief under section 336 ITEPA 2003 that the expenses must be incurred "wholly and exclusively" "in the performance of" the employee’s duties, see EIM31660. In practice that means that relief can only be allowed for:

• the additional unit costs of gas and electricity consumed while a room is being used for work

• the metered cost of water used "in the performance of the duties" (if any) - as regards water rates, see EIM32820

• the unit costs of business telephone calls (including "dial up" internet access).

It may be difficult for employees to calculate the exact amount of the allowable additional costs that they've incurred as a result of working at home. For ease of administration, you may accept that employees who satisfy the conditions for relief (see EIM32760) are entitled to a deduction of £6 per week, or £26 per month for monthly paid employees, (exclusive of the cost of business telephone calls) for each week that they're required to work at home, without having to justify that figure. Employees who wish to deduct more than £6 per week/£26 per month will be expected to keep records and to be able to show how their figure has been calculated. The £6 per week/£26 per month rate applies from 6 April 2020. Prior to this period (tax years 2011 to 2012 - 2019 to 2020) the rate that could be claimed was £4 per week or £18 per month for monthly paid employees. Employees can check if they're eligible to make a claim here.

This is similar to our approach to section 316A ITEPA 2003 under which employers can make tax-free and NICs-free expenses payments to employees who work at home under "homeworking arrangements". See Tax Bulletin 68 (December 2003) and EIM01472 onwards. The interaction between the deduction and the exemption is explained at EIM32825.

Tax years 2005 to 2006 and earlier

For 2005 to 2006 and earlier tax years it was HMRC practice to include council tax, and rent, in the expenses qualifying for relief. For detailed guidance on the approach to be adopted for 2005 to 2006 and earlier years, see SE32810 onwards.