Starting next April, home workers in England will no longer be able to claim tax relief on additional costs such as heating, electricity, or broadband incurred while working from home. This change comes after Labour Party Chancellor Rachel Reeves removed the tax relief in the latest Budget.
During the Covid pandemic, millions benefited from a flat £6 weekly allowance to cover these expenses. However, the new rules mean that only employers will be permitted to reimburse working-from-home costs without tax implications.
Chancellor Reeves emphasized that these measures aim to place public finances on a sustainable footing while fostering “a fairer, a stronger, a more secure Britain.” Her plans include tackling inflation and investing heavily in major infrastructure projects.
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Additionally, Reeves secured an increased budget headroom of £22 billion. This move is intended to reduce speculation over potential breaches of fiscal rules and to lower borrowing costs.
“I said I would cut the cost of living and I meant it. This budget will bring down inflation and provide immediate relief for families,” Reeves stated.
The Budget has received praise from Labour MPs and ministers, who view it as a decisive leftward shift. They believe it buys leadership figures Keir Starmer and Reeves valuable time amid circulating rumors of a leadership challenge.
One senior Labour strategist commented, “This shows we are a full-blooded Labour government. Although ideally welfare would have been prioritized, this budget reflects the current realities. The wealthiest pay more while those most in need are protected.”
However, not all views were optimistic. Another minister remarked, “This does nothing to move the fundamentals. Yet again, an opportunity for boldness has been missed.”
In a candid interview, a different minister told the Guardian, “This buys them a few months with backbenchers and bond markets but further alienates my voters. It only delays an inevitable reckoning.”