Is crew accommodation a taxable benefit in the UK?

Why the answer depends on the site, not the room

UK tax law does not ask whether crew accommodation is a hotel or a rented house. It asks whether the site is a temporary workplace or a permanent one. Under section 339 of the Income Tax (Earnings and Pensions) Act 2003, a temporary workplace is a place an employee attends to perform a task of limited duration or for some other temporary purpose. HMRC's travel guide (490) is explicit that the cost of travelling to a temporary workplace includes "the cost of the accommodation and any necessary meals where an overnight stay is needed", even where the employee stays away for some time.

So a joiner sent from Leeds to a three-month fit-out in Basingstoke is on business travel, and the room near site is not a taxable benefit. The same room for a worker whose permanent workplace is that site is taxable.

When does a construction site stop being temporary?

The 24-month rule. A workplace is not temporary if the employee works there in a period of continuous work that lasts, or is likely to last, more than 24 months. HMRC treats work as continuous at a place if the employee spends 40% or more of their working time there. A site is also permanent if the employee is likely to work there for all or almost all of the time they hold the job, a common trap for workers hired for a single site.

The test turns on what it was reasonable to expect. If a project planned for 18 months overruns to 26, the site stays temporary until the longer duration became the expectation. From that date, the accommodation is taxable.

Most crew stays are nowhere near the limit. Across 24 UK bookings in our system (cancellations excluded), the median stay was 21 nights and 54% were under 30 nights [Bonjour Residences OS, 9 October 2026, n=24]. The risk sits in multi-year rotations and single-site hires.

Situation	Usual UK tax treatment	What to keep on file
Employee sent to a project site expected to last under 24 months	Business travel: accommodation cost is deductible and normally exempt	Site name, expected end date, share of working time spent there
Site becomes a permanent workplace (over 24 months at 40% or more of working time, or the whole job)	Ordinary commuting: accommodation is a taxable benefit	Date the expectation changed, payroll or P11D treatment from then on
Flat accommodation allowance with no receipts	Treated as earnings unless costs were actually incurred or an approved rate applies	Invoices, or the HMRC-approved rate
Worker supplied through an agency or umbrella under supervision, direction or control	Each engagement is a separate employment, so relief is generally lost	Engagement route and contract chain
Self-employed subcontractor paying their own room	Hotel rooms on overnight business trips are an allowable expense	Their own invoices

Does it matter whether we book a hotel or a house?

Only if it becomes taxable. HMRC treats houses and flats as "living accommodation" and hotel rooms as other accommodation, valued differently. Gov.uk confirms relief for accommodation at a temporary workplace for up to 24 months. Since 6 April 2016, fully deductible expenses and benefits are exempt and, per HMRC's manual, need no P11D, yet the gov.uk accommodation guide still says to report them. Agree the route with your payroll adviser first.

Flat allowances are where most errors start

Relief covers costs actually incurred. In HMRC's example, an employee paid a hotel allowance who stays with a friend is taxed on all of it, and anything above the necessary cost counts as earnings. Paying the supplier directly against an invoice keeps it clean. For VAT on longer stays, see Crew rotations and the 28-day VAT rule.

Agency, umbrella and self-employed crews

Since 6 April 2016, workers supplied through an agency or umbrella company under supervision, direction or control are treated as having a separate employment for each engagement (section 339A ITEPA), so accommodation relief is generally lost. Self-employed subcontractors can claim hotel rooms and meals on overnight business trips as allowable expenses, according to gov.uk.

What should bookers do differently?

• Record the expected duration of every site at mobilisation, plus the share of each worker's time there. Update it the day the programme changes.
• Tie every booking to a site and an end date, not an open-ended room.
• Pay the actual cost against an invoice instead of a flat allowance, unless you use an HMRC-approved rate.
• Check the engagement route of every worker before you promise "accommodation included" to agency or umbrella labour.
• Match the housing type to the stay length. Our clients have saved 20-30% by using the correct market for the length of stay.

The property also has to meet safety and licensing rules, covered in What standards does worker accommodation have to meet in the UK? For long rotations, see long-stay accommodation for project teams. If you charge accommodation back to workers, the minimum wage accommodation offset (£11.10 a day from April 2026) applies; for posted crews, read Can we deduct crew accommodation from posted workers' pay?

This article explains the general rules. It is not tax advice for a specific engagement.

FAQ

Is accommodation provided by an employer taxable in the UK?

Usually yes near a permanent workplace, usually no when the employee stays away to work at a temporary workplace.

What is the 24-month rule for contractor accommodation?

A site stops being a temporary workplace if the employee works there, or is expected to work there, for 40% or more of their working time over a period of more than 24 months. From then on, accommodation costs are taxable.

Can agency workers claim accommodation expenses?

Generally not when they work through an agency or umbrella company and are subject to supervision, direction or control, because each engagement counts as a separate employment and the site becomes their permanent workplace.

Is an accommodation allowance taxable?

Yes, unless it matches costs actually incurred or is paid at an HMRC-approved rate.