Remote work employment law: UK compliance for small businesses

Published 10 March 2026

Table of contents

• What is the legal basis for remote and hybrid work in the UK?
• How to change contracts for hybrid and remote work
• Employer responsibilities for employee health and safety – and data security
• How payroll and tax change for remote work in the UK
• Set up a remote work policy for your small business
• Get remote and hybrid work sorted with Xero
• FAQs on remote and hybrid work in the UK

Key takeaways

• Employees have a statutory right to ask for changes to where, when, and how they work under the flexible working framework. As an employer, you’re not obliged to agree to a request, but you must consider it fairly and respond promptly.
• Use the framework to evaluate remote and hybrid requests and document your decisions.
• Agree to contract changes with your employee, update the place of work, and avoid relying on mobility clauses to force permanent location moves.
• A work from home policy should cover safety, data, expenses and performance.

What is the legal basis for remote and hybrid work in the UK?

Remote and hybrid working expanded rapidly during the pandemic. Employees liked these options and the experience proved many roles can be done partly or fully from home, so they've now become a routine part of workforce planning.

However, there’s no automatic legal right to work remotely in the UK. The basic principle behind the remote and hybrid working legislation in the UK is that employees have the right to ask, and employers must follow a fair process, but the final arrangement depends on mutual agreement.

Here are the rules:

• Employees have a statutory right to request changes to where, when, and how they work under the flexible working framework. This right applies from their first day of employment (the 26-week qualifying period was removed in April 2024).
• Under the remote work employment law, there is no obligation for employers to approve every request, but you must consider each one fairly. You must also give your decision in writing within 2 months unless both parties agree to extend the timeframe.
• You’re only allowed to refuse an employee’s request if it falls under one of the statutory business criteria, like cost, performance concerns, or operational reasons. Employers can also proactively offer remote or hybrid working. Employees don’t have to accept unless their contract already provides for home or hybrid working as part of the role.

Here’s a full guide to UK employment law and some tips for managing a remote team.

How to handle the right to request remote working in the UK

Employees can make a formal request to work from home. If you receive one of these statutory requests from an employee to work remotely or follow a hybrid work pattern, you must follow this clear process:

1. Receive the request. Record the date, what the employee wants to change, and when they want the new arrangement to start.
2. Consult. Discuss the request, consider alternatives or a trial period, and outline any effects on service or team cover.
3. Assess business reasons. Review the statutory grounds for refusal and record your reasoning so the decision is clear and transparent.
4. Decide and confirm in writing. Provide a written response within the 2-month legal timeframe, and explain that you will review any trial period.
5. Update terms. Update the contract to reflect the new working pattern and location, and adjust payroll and scheduling to match.

Handle each step the same way each time and keep clear records of discussions and your reasoning. This proves you've followed the legal process for remote working employment laws and helps employees understand how you reached your decision.

Managing disability adjustments for remote work

If an employee has a disability that affects how or where they can work, consider whether homeworking, partial homeworking, or a different work location would help them carry out their role.

Base your decision on what's reasonable and what the employee needs to do their job well – not on the statutory business reasons used for flexible working requests.

Any adjustments you make don’t have to be permanent. They can be trialled, time-limited, or reviewed periodically. Approach discussions with your employee openly, make sure you both understand what’s reasonable, and keep clear records of what you both considered and agreed upon.

How to change contracts for hybrid and remote work

When an employee switches to a hybrid or remote work arrangement, update their contract to reflect their new place of work. Even small changes to location or working time are best confirmed in writing. Updates like this help your remote work contracts meet UK requirements and clarify expectations for you and the employee.

Here are the steps to vary an employee’s place of work (with their consent):

• Review the current contract and relevant policies. Check what you’ve already agreed to for homeworking, hours, and place of work, and how the proposed change fits with your policies.
• Consult with the employee on the proposed hybrid or home pattern and operational needs. Discuss how the arrangement will work in practice – cover attendance expectations, team coordination, and any impact on the role.
• Agree to the change and any time-limited trial. Agree to the change and any time limit for testing the arrangement. In your write-up of the outcome, set clear expectations and any review dates.
• Issue a written variation or updated contract and policy. Use a variation letter for simple changes, and an updated contract if several terms need revising.
• Update payroll, scheduling tools, and expenses processes. Adjust your internal systems to reflect the changes, including expenses rules or any homeworking allowances your business offers.

Special cases: mobility clauses and redundancy

Here are some special case scenarios to consider:

When to use a mobility clause for changes to working location

Some contracts include a mobility clause that allows the employer to change an employee’s work location. You should only invoke these clauses when necessary – they’re generally best used for minor or temporary changes. For example, you might reasonably ask an employee to work from home for a week while essential building work is carried out at the office.

For significant or permanent relocations, it’s better to reach an agreement with the employee rather than rely solely on the clause.

When changes create redundancy risk

Suppose your business permanently relocates to a different workplace, and the employee cannot reasonably travel there. In that case, the role at the original location may become redundant, meaning routine redundancy procedures apply if the contract cannot continue on its existing terms. What counts as reasonable depends on things like travel time and cost, transport options, and the employee’s personal circumstances.

Potential redundancy doesn't apply if the employee moves further away by choice – only when the employer makes the change to the workplace location.

If the employee accepts the new location, you can simply amend the contract with the new workplace address.

Employer responsibilities for employee health and safety – and data security

Under remote work employment law, an employer’s duty of care doesn’t change just because someone works from home or splits their time between home and the office – the standards that apply to remote and hybrid workers also apply to on-site staff.

This means employers must assess relevant risks, provide suitable equipment where needed, and ensure all employee data is handled securely in line with UK data protection law.

Carry out DSE checks and equipment for remote workers

You need to ensure your remote staff can work safely and comfortably by assessing the risks of computer and desk work. This is often referred to as a Display Screen Equipment (DSE) assessment. DSE checks evaluate an employee’s posture, screen setup, lighting, and other factors that can cause strain during regular computer use. Your staff can complete DSE assessments through self-assessment forms or virtual checks.

Employees should also have a suitable workstation setup. Based on the assessment, you might need to provide them with a laptop stand, keyboard, mouse, or a supportive chair, for example. You don’t have to recreate a full office at home, but you need to take reasonable steps to meet any needs a DSE test identifies.

Follow working time rules for remote and hybrid roles

The Working Time Regulations set limits on weekly working hours and guaranteed minimum rest breaks. Working from home does not change these basic protections – the rules still apply for everyone.

Employers must make sure remote workers take regular rest breaks, do not regularly exceed weekly working limits, and respect boundaries around out-of-hours work communications. This helps prevent burnout and maintains healthy work patterns.

Here’s more information on working hours from the government.

Data privacy and remote employee monitoring laws in the UK

Remote working increases the risk of data breaches. Employers must therefore make sure a remote employee’s working practices meet UK GDPR requirements to reduce the chance of information being leaked, hacked, or accessed without authorisation.

This means you should, for example:

• use encrypted devices when possible
• make strong passwords mandatory
• store sensitive information securely

If you monitor productivity or system use, you have to tell your employees what your company is monitoring, why the data is needed, how it will be used, and how long it is kept, to ensure you comply with all data protection laws.

How payroll and tax change for remote work in the UK

There are only a few payroll and tax differences between remote and on-site work, but it’s still important to understand the tax implications of remote work in the UK, particularly around expenses, travel rules, and how certain costs are treated.

Here’s more about payroll compliance.

Paying remote employees UK minimum wage and holiday pay

Remote work does not change minimum wage or holiday pay rules.

Like all employees, remote workers must receive at least the National Minimum Wage or National Living Wage for the hours they work. Legally, this means that any time spent in remote meetings, getting set up to work, or attending required training must be paid.

The employee’s holiday entitlement should also take those additional paid hours into account, so it reflects their actual working hours rather than a standard office schedule.

Homeworking allowances and remote work expense reimbursement in the UK

Your workers’ costs will typically rise if they work from home. You can choose to offer a homeworking allowance to help your employees cover these costs.

• These payments to employees are tax-free if homeworking is required for the role.
• You can pay up to £6 per week without requiring receipts. Higher amounts are also tax-free if the employee provides evidence of actual extra costs.

If you choose not to reimburse these costs, employees can still claim tax relief directly from HMRC at the same £6 per week rate. This employee relief will be removed from April 2026, although employers will still be able to make the tax-free reimbursements.

You can also reimburse specific expenses for equipment needed to work safely and effectively, such as office furniture, computer accessories, or other tools employees need for the role.

Travel and temporary workplace rules for hybrid work

Travel between home and the main workplace is classed as ordinary commuting and is not eligible for tax relief. You can reimburse these costs, but the reimbursement is taxable and must be processed through payroll.

Hybrid arrangements generally don’t change this. If an employee is contracted to attend the office once per week, that office is still a permanent workplace, so travel to it is taxable.

In rare cases, a workplace may count as a temporary workplace – such as when an employee visits another site occasionally, or works from there for a short-term project. In these situations, travel costs may be reimbursed tax-free.

Cross‑border remote work payroll and tax considerations

If an employee works from another country, even for short periods, international remote work laws for UK employers apply. These affect payroll, tax residence, and social security. For example, you may need to operate payroll taxes in the other country if the employee creates a local tax presence there, and the employee may be liable for income tax there, too.

National Insurance and social security rules also vary by country. UK employees working in the EU may be able to remain within the UK system for up to 24 months under a certificate of coverage, but each country has its own rules.

Double Taxation Agreements (DTAs) help determine which country has the primary right to tax an employee’s income and how to avoid taxing the same income twice. UK employees may need to apply for a Certificate of Residence from HMRC to prove UK tax residence and claim tax relief under a DTA. Each country has its own agreement with the UK, so any claim you make must follow that country’s rules. This often means providing a separate Certificate of Residence for each jurisdiction where relief is claimed.

Because tax and social security obligations can change quickly when an employee works abroad, check cross-border arrangements before your employee leaves the country so you know what to expect. It’s a good idea to get specialist advice to make sure you comply with the other country’s rules.

Set up a remote work policy for your small business

A clear work from home policy helps small businesses set expectations for their staff and helps you approve, manage, and review remote and hybrid arrangements consistently.

Here are the basics to include in your policy:

Eligibility and approval processes

Although every employee has the right to request remote working in the UK, by outlining your process you’ll help manage your team’s expectations and help them understand they aren’t being discriminated against.

Set out:

• who’s eligible for remote or hybrid work
• how requests should be made
• the steps you’ll follow when reviewing them
• the business reasoning behind any role-based criteria, such as why some roles can’t be performed remotely

Equipment security and data rules

Clarify what equipment the business will provide and whether your employees can use their own devices. Cover the basics of secure working from home:

• how to access systems safely
• how to handle confidential information in a home environment

Expenses and benefits rules for remote work

List which costs the business will cover, such as homeworking allowances, equipment, or reimbursable expenses. Explain how to submit claims and when employees need your approval.

Performance monitoring and fairness in hybrid teams

Set out your expectations for performance across your team so that everyone knows they’ll be treated fairly wherever they work. For example, you should clarify that the same performance measurements and standards apply to on-site, hybrid, and remote staff. And if you use monitoring tools, be clear about what you monitor and why, and how this is done.

Get remote and hybrid work sorted with Xero

Managing remote and hybrid teams is easier when your systems work smoothly. Xero brings contracts, payroll, and expenses into one place, helping you keep accurate records, meet payroll and tax obligations, and reduce the risk of errors or missed deadlines as your team works across locations.

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FAQs on remote and hybrid work in the UK

Here are answers to some common practical and legal questions for employers and employees about remote and hybrid work:

What is the new law for working from home?

There is no automatic right to work from home, but employees can request homeworking from their first day on the job. As an employer, you have to consider all requests reasonably and respond within 2 months.

Do employers have a legal responsibility for employees who work remotely?

Yes. Employers are responsible for the health and safety of remote workers in the UK, and must meet the same duty of care as they do for on-site staff. They must carry out appropriate health and safety checks, provide equipment suitable for the job, and ensure safe working practices wherever the employee works from.

What is the 60:40 remote-working policy?

The 60:40 model is a hybrid working pattern where staff spend 60% of their time working remotely and 40% in the workplace – typically 3 days at home and 2 days in the office in a standard working week. There’s no legal requirement to use this split, and the balance of home and office work is entirely up to each business.

Can employees claim tax relief for working from home?

Yes – but only when homeworking is required by the employer and not optional.

How do I check right to work for remote hires?

Remote hires still require right-to-work checks. You can use the Home Office online checking service for eligible documents, or arrange a live video call in which the employee shows their original identity documents, following the Home Office’s prescribed process.

Learn more about hiring remote workers.