Reclaim VAT on hotel

HelenaBrian · March 2023

Hi Guys. I have an employee who stays in a hotel 2 days a week to be closer to work. The remaining 3 days he commutes from Scotland to Lancashire. My question is can we claim VAT back on his hotel stay. I tried looking it up but I couldn't find anything definite. It is not entertainment for sure. Thanks in advance. Helena

douglasstroud · March 2023

Is this a permanent workplace for the employee?

AndrewLeyland · April 2023

One of the first questions was when I went to my current workplace because we had Business Development Managers that spent a lot of time on the road. Instead of me talking about this hopefully, this link will help.
https://www.taxoo.co.uk/hmrc-travel-expenses-temporary-workplace/

also off the Gov website
"Travel expenses
You can reclaim VAT on employee travel expenses for business trips. Travel expenses can include transport, meals and accommodation that you pay for. Find out who counts as an employee.

You can reclaim VAT on other kinds of expenses (not just those related to travel) for self-employed people who are treated as employees.

You cannot reclaim VAT if you pay your employees a flat rate for expenses."

douglasstroud · April 2023

Which brings us back to my original unanswered question
Is this a permanent workplace?

HelenaBrian · April 2023

Hi Guys Apologies @douglasstroud I thought clicking Yes next to your comment answered your question - still new to this... Yes it is his permanent place of work and if he is not working in the office he works from home. The hotel stay was temporary to help train new staff members. My confusion was between business trip (can you class it as a business trip if he comes to work?) and something I read about farmers providing a place to stay for their workers, which confused me even more. Thank you again for your kind help.

Jasperlenin · August 6

Thanks for explaining the situation, Even though the stay was for training purposes, HMRC will normally look at where the employee is “based” rather than the reason for staying over. If that location is considered their permanent workplace, overnight accommodation there is usually treated as part of their commute rather than a separate business journey,

Jasperlenin · August 7

Could the accommodation be considered a business expense since the stay is temporary and training,related?

BenWatkins · August 11

Yes – if the stay is genuinely temporary and directly related to training or other business duties, HMRC would normally treat the accommodation as a legitimate business expense.

Here’s why:

Training counts as a business purpose – If the hotel stay is required because the employee is attending work-related training or carrying out duties away from their normal place of work, the cost is considered wholly, exclusively, and necessarily for business.

Temporary workplace rules apply – If the location is attended for a limited period (generally less than 24 months) and is not their permanent base, HMRC views it as a temporary workplace. In this case, both the cost of travel and associated accommodation are allowable.

VAT position – With a valid VAT invoice in the company’s name, you should be able to reclaim the VAT on the hotel stay, as it is for genuine business travel.

Tip: Document the reason clearly – keep a record that the stay is for training, along with dates and proof of attendance. That way, if HMRC ever queries it, you can demonstrate that it’s not ordinary commuting but necessary business travel.

douglasstroud · August 11

How is it temporary if it is his permanent place of work?
If paid by Company possible BIK?

Reclaim VAT on hotel

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