Relocation Expenses: The GBP 8,000 Tax-Free Allowance for Employees 2026/27

Moving for work without a tax bill

Relocating for a job is expensive, but the tax system offers real help. Where an employer pays or reimburses the cost of an employee moving home for work, up to GBP 8,000 of qualifying expenses can be free of Income Tax and National Insurance.

This is not a payment you can simply ask for in cash. It applies to genuine relocation costs that your employer covers when you start a new job or your existing job moves to a new location far enough away that you need to move home.

What qualifies

The exemption covers a defined list of moving costs, including:

• Estate agent and legal fees on selling your old home and buying a new one.
• Stamp Duty Land Tax on the new property.
• Removal, transport and storage of your belongings.
• Reasonable travel and subsistence connected with the move.
• Certain costs of temporary accommodation while you relocate.

Replacement of domestic goods can also qualify within the rules. What does not qualify includes things like compensation for a drop in house value or mortgage costs that fall outside the listed categories.

Worked example

Hannah moves cities to take a promotion. Her employer agrees to cover her qualifying relocation costs.

• Estate agent and legal fees: GBP 3,500.
• Removal and storage: GBP 1,500.
• Stamp Duty Land Tax on the new home: GBP 2,000.
• Total qualifying costs: GBP 7,000.

Because the total is below GBP 8,000, the whole GBP 7,000 is paid tax-free. If her costs had been GBP 9,000, the first GBP 8,000 would be exempt and the remaining GBP 1,000 would be a taxable benefit, costing a basic-rate taxpayer GBP 200 in Income Tax.

The conditions to meet

For the exemption to apply:

• You must be changing your main residence because of a new job or a change of workplace.
• The old home must not be within reasonable daily travelling distance of the new workplace.
• The expenses must be qualifying costs on HMRC's list.
• The costs should usually be incurred by the end of the tax year following the one in which the new job starts.

Why higher earners should pay attention

For a higher-rate taxpayer, GBP 8,000 of relocation help received tax-free is worth far more than the same amount paid as taxable salary. GBP 8,000 of extra salary in the 40% band would lose GBP 3,200 in Income Tax plus National Insurance. Receiving the same value as a qualifying relocation payment keeps the full amount.

The exemption also does not count toward adjusted net income, which matters if your income is near the GBP 100,000 Personal Allowance taper.

Quick recap

• Up to GBP 8,000 of qualifying relocation expenses can be tax and National Insurance free.
• The limit is per qualifying move, not per year.
• Only listed costs qualify, such as legal fees, stamp duty and removals.
• Spend above GBP 8,000 becomes a taxable benefit in kind.
• This is general information, not financial advice. Check the current rules on gov.uk.

To compare the value of a tax-free relocation payment against taxable salary, use the income tax calculator on CalcHub and read the relocation expenses guidance on gov.uk.