Claiming VAT on Travel and Accommodation: UK 2026/27

A VAT-registered business can normally reclaim VAT on employee travel and hotel accommodation where the cost is incurred for a genuine business journey and the supply is made to the business. Recovery is not automatic: the expense must support taxable business activities, the business must hold appropriate evidence, and any private or entertainment element must be excluded.

The following guidance reflects HMRC’s rules for the 2026/27 tax year.

When is VAT on business travel recoverable?

Input tax can generally be recovered where all of the following apply:

• the business is registered for VAT;
• the journey is undertaken for a business purpose;
• the cost is borne by the business;
• the supply is made to the business rather than privately to the employee;
• a valid VAT invoice or other acceptable evidence is retained; and
• the cost relates to taxable business activities rather than exempt or non-business use.

Examples may include travel to a temporary workplace, a client site, a training event or another business location. Ordinary home-to-work commuting is normally private travel and does not become recoverable merely because the employer reimburses it.

Hotel and similar accommodation

HMRC VAT Notice 700 states that when an employee, director, partner or sole proprietor is away from their normal place of work on a business trip, the VAT on hotel and similar accommodation can be treated as input tax.

The invoice should ideally be addressed to the business and identify the supplier, date, VAT amount and accommodation provided. If a hotel bill includes private nights, a partner’s costs, spa treatments, entertainment or other personal items, those amounts must be removed or fairly apportioned.

Meals and subsistence

Where the business pays the actual cost of an employee’s meals on a qualifying business trip, the VAT can generally be treated as input tax. HMRC also permits sole proprietors, partners and directors to recover VAT on meals taken while away from their normal place of work on a business trip, but not on meals without a business purpose.

A flat-rate subsistence allowance is different. If the employer simply pays an employee a fixed allowance, the business cannot claim input tax on that payment because the allowance itself is not a VATable supply to the business. Where the business reimburses only part of an evidenced actual cost, HMRC allows recovery of the VAT fraction of the amount the business pays, subject to the normal conditions.

Rail, air, taxi and vehicle costs

Many domestic passenger transport fares—such as qualifying rail, bus and air travel—are zero-rated, so there may be no VAT to reclaim even though the cost is allowable for other tax purposes. Taxi and private-hire charges depend on whether the operator is VAT registered and what the invoice shows.

Fuel and vehicle expenses have their own VAT rules, particularly where there is private mileage. See our separate guide to claiming VAT on fuel used for business.

Employee booking versus business booking

Who contracted with the supplier matters. If an employee books and pays for a service personally and the business later makes a general reimbursement, HMRC may question whether the supply was made to the business. The strongest evidence is a VAT invoice in the business’s name, a clear business purpose and payment or reimbursement records.

For normal employee expense claims, retain the original VAT receipt, the employee’s expense form, the reason for travel, dates and destination. Credit-card statements alone do not normally contain all the information needed to support input tax.

Travel involving clients or entertainment

Travel and accommodation supplied as free hospitality to a client may fall under the business-entertainment restriction. VAT relating to UK client entertainment is generally blocked. Staff costs within a mixed event may be recoverable, but the client element should be identified and excluded.

Read our detailed guide on VAT and client entertainment before claiming costs for hospitality trips or events.

Overseas travel

Overseas suppliers will not normally charge UK VAT. A business cannot reclaim foreign VAT through its UK VAT Return. Depending on the country and the nature of the expenditure, a separate overseas VAT refund procedure may be available. Retain the foreign invoice and check the local rules.

Partly exempt businesses and mixed use

If the business makes exempt as well as taxable supplies, travel-related input tax may be restricted under the partial-exemption rules. Private or non-business use must also be removed using a fair and reasonable apportionment.

Practical checklist

• Record the business reason for every journey.
• Obtain a valid VAT invoice where VAT is being claimed.
• Separate private, partner and client-entertainment costs.
• Do not claim VAT where the fare is zero-rated or no VAT was charged.
• Check who received the supply when an employee booked personally.
• Apply partial-exemption restrictions where relevant.
• Keep the invoice and expense record for the statutory retention period.

Frequently asked questions

Can VAT be reclaimed on a hotel for a business trip?

Normally yes, where the trip is for business, the business bears the cost and appropriate VAT evidence is retained. Private elements must be excluded.

Can VAT be reclaimed on train tickets?

Qualifying UK passenger transport is commonly zero-rated. If no VAT was charged, there is no input VAT to reclaim.

Can VAT be reclaimed on an employee’s flat-rate meal allowance?

No. HMRC says input tax cannot be claimed on a flat-rate subsistence payment. The treatment differs where the business pays or reimburses an evidenced actual cost.

Official source

See section 12 of HMRC VAT Notice 700, updated 25 June 2026, and HMRC’s separate business-entertainment guidance. Complex cases should be reviewed by a VAT adviser before the return is submitted.