Change to HMRC rules will affect employees who pay their own homeworking costs, while firms can still reimburse staff tax-free

Employees in Wales who claim tax relief for extra household costs while working from home will lose that support from Monday (April 6), as new HMRC rules come into force at the start of the 2026-27 tax year.

The change removes the process that allowed eligible employees to claim income tax relief directly from HMRC for additional homeworking expenses, such as heating, electricity and business phone calls, when those costs were not reimbursed by their employer. Under the previous system, most claimants could use a flat rate of £6 a week without providing receipts.

The relief was widened during the coronavirus pandemic to cover employees who had to work from home because of public health restrictions rather than because of their specific employment duties. The Government announced in last year’s Budget that this tax relief would be removed from April 6, 2026.

Azets, the accountancy and business advisory firm, said the end of the relief could leave some workers out of pocket if they are still covering homeworking costs themselves. The firm said basic rate taxpayers could lose relief worth about £62 a year, while higher rate taxpayers could lose around £124. Those figures are based on tax relief on £6 a week, rather than a direct cash payment.

Clair Williams, Head of Employment Tax at Azets, said employers may now face questions from staff about whether homeworking costs should be reimbursed instead.

However, employers are still able to reimburse eligible homeworking expenses without charging income tax or National Insurance under existing HMRC rules.

HMRC guidance states that tax relief for working from home applies where an employee has to work from home, for example because their employer does not have an office, rather than simply choosing to do so. Employees can also still make claims for earlier eligible tax years, subject to the normal deadlines.

The Treasury says the measure will save money over the coming years, as ministers tighten the rules around homeworking expenses and bring to an end the broader relief that was introduced during the pandemic.

TWO in three savers say a fixed interest rate would give them greater peace of mind when planning their finances, according to new research from Principality Building Society*, as people in Haverfordwest are encouraged to review their savings ahead of the ISA tax year deadline.

The research, conducted with more than 1,500 people, also found that while many savers feel comfortable managing their money independently, a significant number still value the reassurance of speaking to someone when making important financial decisions.

Meanwhile, around one in six people mistakenly believe they must open a new ISA every tax year, highlighting ongoing confusion around how ISAs work. In many cases, particularly for variable savings products, savers may be able to continue paying into an existing ISA.

With the tax year end approaching, Principality Building Society is inviting Members and local savers to speak with colleagues at its High Street branch in Haverfordwest to better understand their options and make informed choices about how to use their ISA allowance.

The research also highlights the appeal of certainty when it comes to savings. Two in three savers say a fixed rate would give them peace of mind, reflecting the reassurance that comes from knowing exactly what return they will receive over a set period. Fixed rate Cash ISAs can provide that certainty, making it easier for some savers to plan ahead.

Vicky Wales, Chief Savings and Lending Officer at Principality Building Society, said: “ISA season can often feel busy and confusing, particularly against the backdrop of changes in the wider financial environment. Many people value the opportunity to talk through their options and feel confident they’re making the right decision.

Every saver’s situation is unique, so having a conversation can help people better understand their choices and how these align with their longer-term plans. Understanding the differences between savings products – including fixed and variable rates – can help savers make the most of their ISA allowance, and ensure their money is working in a way that suits their individual goals.”

Principality Building Society is encouraging anyone in Haverfordwest who would like to review their savings ahead of the tax year end to visit their local branch for a supportive conversation about their options, and how they can make the most of their savings.

Source: Principality Building Society’s own online community, Member Pulse, survey on Cash ISAs, March 2026 (total respondents: 1,544)

Energy price shocks could delay cuts and raise prospect of further hikes

THE BANK OF ENGLAND has held interest rates at 3.75%, as rising tensions in the Middle East push up global energy prices and increase the risk of further inflation.

The decision by the Monetary Policy Committee reflects growing caution among policymakers, despite recent signs that inflation in the UK had been easing.

However, the escalating crisis in the Middle East has unsettled financial markets, with oil and gas prices climbing amid fears of supply disruption and instability along key shipping routes. Economists warn that sustained increases could quickly filter through to higher fuel, transport and manufacturing costs, as well as rising household energy bills.

Emeritus Professor Joe Nellis, economic adviser at accountancy firm MHA, said the latest developments have significantly reduced the likelihood of interest rate cuts in the near future.

He warned that policymakers are mindful of past criticism that central banks reacted too slowly to rising inflation in 2021 and 2022, when price pressures were initially dismissed as temporary.

“The Bank will want to stay ahead of inflation this time,” he said, adding that while current pressures may not yet be structural, officials are likely to act quickly if risks intensify.

The prospect of prolonged high interest rates presents challenges for businesses already grappling with increased operating costs. Higher borrowing costs are expected to weigh on investment, particularly in hiring, potentially weakening the labour market further.

Economists say that while holding rates steady avoids an immediate squeeze on borrowers, the wider outlook remains uncertain. Any sustained rise in energy costs could force the Bank to tighten monetary policy further in order to keep inflation under control.

For households and businesses hoping for a return to lower interest rates, expectations have now shifted, with rates likely to remain higher for longer — and the possibility of further increases still on the table.