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Reclaiming Accommodation on Tax: The Contractor's Guide

Most self-employed contractors and limited-company directors can claim accommodation as an allowable business expense. Here's the framework HMRC works with — not legal advice, but a starting point.

Published 2024-02-12 · Trade Nest Stays Team

Reclaiming Accommodation on Tax: The Contractor's Guide

The 24-month rule

HMRC allows you to claim travel and accommodation to a 'temporary workplace' — defined loosely as somewhere you'll be working for fewer than 24 months. If your contract is open-ended but you genuinely expect it to last under 24 months, the costs are generally claimable.

If you take an 18-month contract and it gets extended to 30, the moment you knew it would exceed 24 months, the costs stop being claimable from that point forward.

What counts as accommodation

Hotel rooms, serviced apartments, contractor housing — all count. So do reasonable subsistence costs (meals, but not alcohol beyond a token amount). Keep VAT receipts for everything.

Trade Nest Stays issues VAT invoices on every stay — net-30 terms for companies, payment-on-completion for sole traders. The invoice references the property, dates, and nightly rate so it stands up to scrutiny if HMRC ever asks questions.

When you're a director of your own Ltd

You can have the company pay your accommodation directly (rather than reimbursing personal expenses) — this avoids the messy 'benefit in kind' calculation and the company reclaims any VAT in the normal way. Speak to your accountant about the best structure for your specific setup.

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