Tax breaks for many who do business from home are abolished in bid to drive extra again into places of work

Rachel Reeves will crack down on working from home as she abolishes tax breaks for those who never go to the office.

Millions of home workers claimed the relief when they were ordered to work from home during the pandemic.

But many have continued to benefit from tax relief if their job requires them to live far away from their office or if their employer does not have an office.

The Budget book states: ‘The government will remove the deduction from Income Tax for non-reimbursed home working expenses.

‘Employers can still reimburse employees for these costs where eligible without deducting Income Tax and National Insurance contributions.’

The relief will be scrapped from April next year.

Home workers can claim tax relief on work-related expenses such as business phone calls, gas and electricity or £6 a week.

This means that basic rate taxpayers can claim up to £62.40 a year, while higher rate taxpayers get £124.80 and top-rate taxpayers get £140.40.

Chancellor Rachel Reeves delivers her Budget in the House of Commons on Wednesday afternoon

Last year, the Chancellor said civil servants should get back to the office to boost the economy rather than work from home.

‘The Treasury, we are a pretty good department for getting colleagues in,’ she told LBC Radio.

‘But it’s a real mix across Government and I do want civil servants in the office, I lead by example.

‘I do think there is real value of bringing people together and sharing ideas and challenging each other.’

Civil servants are supposed to work at least three days a week in the office.

The Chancellor said she accepted the benefits of ‘flexible working’ but made clear that she believes this was different from people largely working from home.

‘We should be flexible,’ she added. ‘If someone has got a school play of their kid, or sports day, or if they have got an elderly parent they have got to take to a doctor’s appointment, I’m all for being flexible and making sure that people can be able to balance work and family life.

‘But I do think that productivity gains are more likely to happen when you have that sharing of ideas and bringing people together, and I lead by example on that in my department and I think that it’s reaping dividends.’

However, the Government plans to make flexible working the default as part of its Employment Rights Bill.

The tax relief was designed to reimburse those who pay more to work from home in gas and electricity bills, though they save on commuting bills.