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Contractor accommodation expenses can usually be claimed when you stay away from home to work at a temporary workplace. HMRC treats a site as temporary if you expect to work there for 24 months or less. Contractors inside IR35, or employed through an umbrella company under supervision, direction or control, usually cannot claim.
This is a general guide, not tax adviceWe book accommodation, we are not accountants. Rules depend on how you are engaged, so check your own position with an accountant or HMRC before you claim.
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Can contractors claim accommodation as an expense?
Contractors can claim accommodation as an expense when the stay is needed to work at a temporary workplace away from home. The cost must be for the business trip, not for a second home or a move.
In practice, that covers most crews and engineers who travel to a site for a few weeks or months and then move on. It does not cover the daily drive between your home and a permanent workplace, which HMRC treats as ordinary commuting.
How you claim depends on how you work. A sole trader puts it through Self Assessment. A limited company director outside IR35 has the company pay. An employee is paid back by the employer.
Who can claim contractor accommodation expenses?
Whether you can claim contractor accommodation expenses depends mainly on how you are engaged. This table gives the general position.
| How you work | Can accommodation be claimed? | How it is usually handled |
|---|---|---|
| Self-employed sole trader, including CIS subcontractors | Yes, for overnight business trips | Allowable expense in Self Assessment |
| Limited company director, outside IR35 | Yes, at a temporary workplace | Company pays or reimburses, then claims it against Corporation Tax |
| Limited company director, inside IR35 | Usually no, for home-to-site stays | Each contract is treated as a separate employment |
| Umbrella company worker under supervision, direction or control | Usually no, for home-to-site stays | Relief restricted since 6 April 2016 |
| Employee sent to a site by the employer | Yes, at a temporary workplace | Employer books or reimburses, normally with no tax on the employee |
General position only. Sources: GOV.UK self-employed travel expenses and HMRC employment intermediaries guidance.
What is the 24-month rule for contractor accommodation?
The 24-month rule says a workplace stops being temporary once you expect to work there continuously for more than 24 months. From that point, travel and accommodation costs for that site no longer qualify for tax relief.
Two details catch people out. First, the test is what you expect, not what has happened. If a 12-month contract is extended and you now expect the total to pass 24 months, the site becomes permanent from the date of that change, not at month 24.
Second, HMRC looks at how much of your time is spent there. Spending 40% or more of your working time at one site counts as continuous work there. If that is expected to last over 24 months, the site is permanent. HMRC sets this out in its manual at EIM32080.
Examples on long projects
An 18-month road scheme
A crew booked for 18 months on a scheme like the A417 Missing Link expects to finish inside 24 months. The site is a temporary workplace from the start.
A contract extended to 30 months
A 12-month contract is extended in month 10, taking the expected total to 30 months. The site becomes permanent from month 10, when the new length is known.
A three-year programme
A project like the M5 junction 10 works runs from autumn 2026 to spring 2029. Anyone expecting to work there throughout should check their position before claiming.
Can you claim accommodation inside IR35 or through an umbrella company?
Usually not. Since 6 April 2016, most umbrella workers and personal service companies inside IR35 lose relief for home-to-site travel and subsistence. That includes accommodation, where the worker is under supervision, direction or control.
The reason is that each contract is treated as a separate employment. The site you work at becomes your permanent workplace for that contract, so staying near it is treated like commuting.
There are narrow exceptions. A worker sent from that site to visit another location for a few days can usually still claim for that trip. The rules are detailed, so ask your umbrella company or accountant how they apply to your contract.
What records do you need to claim accommodation costs?
You need an invoice or receipt for every stay that shows the dates, the property address, the amount paid and who paid it. Keep a note of which site you worked at and why you needed to stay away.
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Where a crew shares one house, the employer or company usually pays the whole invoice. If self-employed crew members split a house, each one keeps a record of their share and how it was worked out.
Booking contractor accommodation that is easy to claim
Esho Stays issues straightforward invoices to companies, with the business name, the property address and the dates of the stay. Booking direct also means one invoice for the whole crew, rather than a pile of hotel receipts.
£195 / night5-bed house, Cirencester
- 5 bedrooms
- 7 beds
- 3 bathrooms
- Drive for 2 to 3 vehicles
Close to the A417 Missing Link and The Steadings housing site.
See the 5-bed houseComparing options for the budget? Our guide to contractor accommodation versus hotels sets out the costs, and our long-term contractor accommodation guide covers monthly stays. See all our contractor and trade stays.
Frequently asked questions
Can I claim accommodation if I am a CIS subcontractor?
Usually yes. CIS subcontractors are normally self-employed, and GOV.UK lists hotel rooms and meals on overnight business trips as allowable expenses. The stay must be for business, away from your usual base. Keep the invoice and record which site you worked at, then include the cost in your Self Assessment.
Does my employer pay tax if it books accommodation for me?
Normally no, if the accommodation is needed for work at a temporary workplace. The cost would be deductible for you if you paid it yourself, so the employer can pay it without it counting as a taxable benefit. If the site is a permanent workplace, the position changes, so check with the payroll team.
Can I claim for a shared house with my crew?
Yes, the rules are the same for a shared house as for a hotel room. If the company pays the whole invoice, it claims the whole cost. If self-employed crew members split the bill, each person claims their own share and keeps a note of how it was worked out.
What if my contract is extended beyond 24 months?
The site stops being a temporary workplace from the date you first expect the total to go past 24 months. Accommodation costs from that date usually no longer qualify for relief. Costs before that date are not affected. Speak to an accountant as soon as an extension is likely.
Do Esho Stays invoices show everything I need?
Yes. Our invoices show the name of the person or company paying, the property address, the dates of the stay and the amount. If your accounts team needs anything else on the invoice, such as a purchase order or project code, tell us when you book.
Next step
Need an invoice in your company’s name?
Tell us the company details when you book, and every invoice will show them along with the dates and address.