Is hotels
tax deductible?

Yes, for business trips. Hotel rooms and reasonable meals on business trips that need a night away are allowable (GOV.UK; HMRC BIM47705). Hotels near your normal base, family members' rooms and the holiday part of a trip are not.

A hotel on a business trip is one of the clearest allowable costs, as long as the trip is for the business and the stay is away from your normal base. The rules tighten when a trip mixes business and pleasure, or when you stay near where you usually work.

Is hotels tax deductible?

The HMRC rule

Vehicle insurance, repairs, fuel, parking, hire, road tax and breakdown cover, fares and hotel rooms for business trips are allowable. Travel between home and work, non-business journeys, and fines are not. The rule comes from Car, van and travel expenses, HMRC Business Income Manual BIM47705: meals and accommodation.

GOV.UK lists hotel rooms and meals on overnight business trips as allowable travel costs (travel expenses). HMRC's manual adds that where a business trip necessitates one or more nights away from home, the hotel and reasonable overnight subsistence are deductible, but not accommodation and subsistence at the base of trade operations, even if a contract requires you to live there (BIM47705). The same treatment extends to self-employed long-distance lorry drivers who sleep in their cabs.

When you can claim it

• A hotel, guesthouse or short let when a business trip means a night away from home.
• Reasonable meals taken during the overnight stay, on the same bill or not.
• Accommodation near a temporary workplace you travel to for a project.
• Hotels on trips made wholly for a property letting business.

When you cannot

• Accommodation at your normal place of business, even if you work long hours there.
• Extra nights added for a holiday, and rooms or meals for family members.
• A second home, or permanent accommodation near where you usually work.
• Lavish costs beyond what the business trip reasonably needs.

What to claim instead

If a trip combines business and a holiday, claim the nights that were needed for the business and leave out the rest. If you often stay near a regular client for long periods, check whether the site is still a temporary workplace: once it becomes your normal base, the accommodation there stops being allowable.

How to decide if you can claim it

1. Was it for the business? A cost is only allowable if you incur it wholly and exclusively for the business. If it also serves a personal purpose that cannot be separated, such as clothing that keeps you warm or a meal that keeps you going, HMRC disallows it.
2. Is part of it personal? Where a cost has a business part you can identify, such as the business calls on a phone bill or the business miles in a car, you claim that part and leave the rest out, on a reasonable basis you can explain.
3. Is it a running cost or something you keep? It is a running cost, so on the cash basis it counts when you pay it and on traditional accounting when you incur it. Nothing about it needs spreading over later years.
4. Is there a specific rule? For hotels, the deciding rule is business travel and vehicle running costs: vehicle insurance, repairs, fuel, parking, hire, road tax and breakdown cover, fares and hotel rooms for business trips are allowable. Travel between home and work, non-business journeys, and fines are not.

Worked example: a trade show

A furniture maker from Cornwall exhibits at a three-day trade show in Birmingham. He pays £330 for three nights in a hotel and £96 for evening meals. Both are allowable, a total of £426. He stays two extra nights for a weekend away with his partner; those nights, and his partner's share of the room, are not.

Reasonable meals with the stay

HMRC allows the reasonable cost of meals taken in conjunction with overnight accommodation, whether they are on the hotel bill or bought elsewhere. Reasonable means what a business traveller would normally spend, not a celebration dinner. Drinks at the bar with a client are business entertainment, which is never allowable, even on a business trip.

Short lets and staying with friends

A short let or an apartment booked for a business trip is treated like a hotel. If you stay with friends or family instead, there is no accommodation cost to claim, but you may still have meals and travel. A small gift to thank your host is personal, not a business expense.

Lorry drivers and sleeping in the cab

HMRC extends the overnight treatment to self-employed long-distance lorry drivers who sleep in their cabs rather than in a hotel: reasonable overnight subsistence is allowable, even though there is no hotel bill. Keep a record of each night away and what you spent.

Overseas trips

The same rules apply abroad. A trip to meet overseas customers or attend a trade fair can justify flights, hotels and reasonable meals, but a trip that is mainly a holiday with a meeting added cannot. Keep the invitation, agenda or bookings that show the business purpose, and convert foreign currency costs to sterling at a consistent rate.

If you are a landlord

A landlord with property some distance away can claim a hotel if a trip wholly for the letting business needs a night away, for example to deal with a change of tenants. A stay that is partly a visit to friends is not wholly for the business.

Where it goes on your return and in MTD

On the self-employment pages of your return, the claimable part of hotels belongs in car, van and travel expenses (SA103F box 20). The same category is used in Making Tax Digital quarterly updates, so recording it in the right place once keeps both returns consistent.

For a landlord, it belongs in travel costs (property) (SA105 box 29 on the UK property pages), and in the matching category of a Making Tax Digital property update.

If your turnover was under £90,000, you can use the short self-employment pages (SA103S), which ask for a single figure for total allowable expenses rather than a box-by-box breakdown, and the full pages let you give just a total in box 31 too. The category still matters for your own records and for Making Tax Digital, where each quarterly update uses the same categories unless you choose to send one consolidated figure.

The accounting basis changes when a cost counts. On the cash basis, the default for sole traders since 2024/25, it counts when you pay it; on traditional accounting, when you incur it, with things you keep claimed through capital allowances.

How much an allowable cost saves

An allowable expense does not come back to you in full: it reduces your profit, so it saves tax at your marginal rate. For a sole trader in England, Wales or Northern Ireland that is 26p in the pound at the basic rate (20% Income Tax plus 6% Class 4 National Insurance) and 42p at the higher rate. The sole trader tax calculator works out the figure for your own profit.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep the hotel invoice, with the dates and the business reason for the trip, such as a client meeting or event booking. Where the bill includes a partner or extra nights, note the business part you are claiming.

If Making Tax Digital for Income Tax applies to you (qualifying income over £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028), the records must be digital, and each quarter's costs go into a quarterly update. Check your date with the MTD requirement checker.

Common mistakes

• Claiming the holiday nights of a mixed business and leisure trip.
• Claiming accommodation at your normal place of business.
• Treating drinks with clients on a business trip as travel rather than entertainment.

Related expenses

This item sits in the car, van and travel expenses category, alongside buying a car, buying a van, car insurance, car leasing and PCP, car repairs and servicing, electric and hybrid cars, food and meals and fuel. The A to Z of expenses answers the same question for every other cost.

If you record your costs in TapTax, each one lands in the HMRC category it belongs to, with its receipt attached, so your quarterly updates and year-end return use the same figures.