Company invoicing and VAT on contractor accommodation, explained
Most contractor accommodation problems are not about the house. They are about approval: a site manager finds the right property, then finance will not release payment without a purchase order, a VAT invoice or the right cost code.
Here is how company-invoiced stays are usually structured, and what to line up before the crew mobilises.
Direct billing versus per-diem
Under direct billing, the company books the accommodation and we invoice the business. The crew pays nothing and claims nothing. This is the cleaner model: one invoice per property per period, VAT recoverable in the normal way, and no expense reconciliation.
Under per-diem or subsistence, the worker books and claims back. It is administratively heavier, tends to push crews into cheaper rooms, and produces dozens of receipts a month for one project. Most companies running crews of three or more move to direct billing quickly.
What goes on the invoice
A usable accommodation invoice shows the property address, the exact nights covered, the nightly or weekly rate, the number of occupants where relevant, your PO or project reference, VAT shown separately, and the refundable deposit shown as a separate line so it is not mistaken for cost.
If your finance system needs a specific reference format or a cost code per site, tell us at booking and we will put it on every invoice for the duration.
VAT: what is usually recoverable
Accommodation for employees travelling for work is normally treated as a business cost, and VAT on it is generally recoverable by a VAT-registered business, subject to the usual rules on business purpose and record keeping.
Two things affect the VAT position on longer stays: the reduced value rule that can apply to stays of more than 28 consecutive nights in certain accommodation, and whether the supply is treated as accommodation or as a licence to occupy. This is genuinely case-specific, so confirm the treatment for your booking with your accountant rather than assuming — we will supply whatever documentation they ask for.
Payment terms and deposits
Short crew bookings are typically paid before arrival. Ongoing or rolling bookings are usually invoiced monthly in advance on agreed terms once an account is set up.
Every booking carries a refundable security deposit, returned after checkout once the property has been inspected. It covers damage and excessive cleaning, not fair wear and tear.
Paperwork that speeds up approval
Ask for these at enquiry stage and most approvals go through first time: a written quote showing total cost for the full period, confirmation that bills and council tax are included, the deposit amount, our public liability and property compliance confirmations, and the cancellation and extension terms.
Bundling those into the booking request typically saves a week of back-and-forth before mobilisation.
Frequently asked
Can you invoice our company with a PO number?
Yes. Send the PO or project reference at booking and it appears on every invoice, along with the property address and the nights covered.
Is VAT recoverable on contractor accommodation?
For a VAT-registered business, VAT on employee work travel accommodation is generally recoverable subject to the usual business-purpose and record-keeping rules. Longer stays can be treated differently, so confirm your position with your accountant.
Do you offer payment terms for ongoing bookings?
Yes. Rolling bookings are normally invoiced monthly in advance on agreed terms once an account is in place.
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