Understanding VAT on UK Serviced Apartments

When booking a serviced apartment in the UK, understanding VAT (Value Added Tax) is essential — especially for corporate travellers, travel managers, and finance teams looking to manage costs and reclaim VAT where possible.

Depending on the type of apartment and length of stay, VAT can range from 0% to 20%. At Checkin Apartments, all properties listed on our website display rates inclusive of VAT, unless otherwise stated. This means the price you see before booking is the total amount payable — with no hidden taxes or service charges.

By knowing the differences between VAT-exempt, full VAT, and service-only VAT rates — and ensuring your company receives the correct invoices — serviced apartment bookings can be both cost-effective and tax-efficient.

Table of Contents

• What Is VAT?
• Types of Serviced Accommodation in the UK
• Types of VAT Rates on UK Serviced Apartments
  • VAT Exempt Rate
  • Full VAT Rate (20% → 4% after 28 nights)
  • VAT on Service Rate
• VAT Quick Reference Table
• Ways Businesses & Travellers Can Reclaim VAT
• How Do I Get a VAT Invoice?
• Best Practices & Tips for Corporate Bookers
• Official HMRC & GOV.UK Guidance
• Final Thoughts & Next Steps

What Is VAT?

VAT (Value Added Tax) is a government tax applied to goods and services in the UK, including short-term accommodation.

In the serviced accommodation sector, VAT treatment depends on:

• The type of apartment or rate booked
• The length of the stay

Stays over 28 nights often benefit from VAT savings under HMRC’s “Reduced Value Rule,” which allows long-stay guests to enjoy lower nightly rates.

HMRC (His Majesty’s Revenue & Customs) is the UK’s tax, payments and customs authority.

Types of Serviced Accommodation in the UK

Serviced apartments come in several formats, including:

• Serviced Apartments: Furnished apartments let short-term with hotel-style services such as cleaning, reception, and linen/towels.
• Long-Stay Apartments (Corporate Housing): Furnished units rented to professionals or businesses for placements, relocations, or extended stays (weeks to months).
• Aparthotels: Purpose-built properties combining apartment units with hotel services, reception, F&B, and daily housekeeping.

Types of VAT Rates on UK Serviced Apartments

When booking UK serviced apartments, you will typically encounter three VAT rate structures:

1. VAT Exempt Rate

• What it is: Fully exempt from VAT
• Price impact: Total net price equals total price paid — no VAT added
• VAT reclaim: ❌ Not reclaimable
• Applies to: Long-term residential-style stays that qualify as VAT-exempt lettings

Tip: For corporate bookings, VAT cannot be reclaimed on exempt rates since no tax is charged.

2. Full VAT Rate

• What it is: Charged at 20% VAT for the first 28 nights. From the 29th night onwards, the VAT rate reduces to 4% per night under HMRC’s Reduced Value Rule
• Unique to serviced apartments: This rule does not apply to hotels
• Conditions: Reduced rate applies only to continuous stays — any check-out/check-in breaks the count
• VAT reclaim: ✅ Fully reclaimable for business customers with a valid VAT invoice

Example:
A 35-night stay:

• Nights 1–28 → VAT at 20%
• Nights 29–35 → VAT at 4%

This provides cost savings for long-term corporate stays while retaining full VAT reclaim eligibility.

3. VAT on Service Rate

• What it is: Only the service portion (cleaning, linen, reception) is VATable
• Breakdown:
  • Rent element: Non-VATable in certain long-let scenarios
  • Service element: VATable at 20%
• Business reclaim: ⚠️ Only the VAT on services can be reclaimed
• Applies to: Rare cases where operators itemise rent and service charges separately

VAT Quick Reference Table

How Businesses Can Reclaim VAT

Businesses and travellers can reclaim VAT depending on UK registration status and type of expense:

1. UK VAT-registered businesses: Reclaim VAT via periodic VAT returns using valid company invoices.
2. Non-UK businesses: Use HMRC’s VAT126 refund scheme for overseas entities, depending on EU/non-EU status.
3. Voluntary UK VAT registration: Companies with significant UK supplies may register to reclaim VAT but take on reporting obligations.
4. VAT group recovery: Allows centrally-managed input VAT recovery across corporate groups.
5. Third-party reclaim agents: Specialist agents can submit claims for non-UK businesses or large volumes of invoices.
6. Partial reclaim/apportionment: Apply only to the business proportion when invoices include mixed business/personal elements.

⚠️ If accommodation is VAT-exempt or zero-rated, there is no VAT to reclaim.

How Do I Get a VAT Invoice?

To successfully reclaim VAT on corporate accommodation, you’ll need a valid VAT invoice from the serviced apartment provider. Here’s how it usually works:

Requesting a VAT Invoice from Checkin Apartments

After completing your booking with Checkin Apartments, you can easily access your VAT documentation:

• Request by email: Simply contact our accounts team at accounts@checkinapartments.com to request a VAT invoice once your booking has been confirmed or your stay has started.
• Access anytime: All VAT invoices are available 24/7 via our secure client portal, allowing finance teams to download, view, and store invoices conveniently.
• Free service: This is a complimentary service for all managed clients, designed to simplify VAT reclaim and ensure compliance.

Requesting a VAT Invoice from a Serviced Accommodation Provider (if booked directly)

If you’ve booked directly with a serviced apartment operator or building management company, the process may vary slightly:

• Contact the property’s accounts or reservations team directly after check-in or once payment has been made.
• Provide the company name, address, and VAT number (if applicable) — invoices must be issued in the company’s name to qualify for VAT reclaim.
• Ask for the invoice to clearly show the VAT rate, total VAT amount, and supplier’s VAT registration number (a legal requirement under HMRC rules).
• For long stays, some providers issue monthly VAT invoices instead of one full invoice at the end — ensure your finance team receives all copies for accurate reclaim.
• If your booking covers more than 28 nights, confirm that the reduced 4% VAT rate is correctly applied after the 28th night, and reflected on the invoice.

Why VAT Invoices Matter

A proper VAT invoice must include:

• The supplier’s name, address, and VAT number
• The date of issue and unique invoice number
• The guest or company name and address
• A breakdown of charges, showing the VAT rate and total VAT charged

Without these details, HMRC will not accept VAT reclaim — so it’s important to review invoices before submission.

Best Practices for Corporate Bookers

• Always request an invoice in the company name
• Use central billing or corporate account arrangements to standardise invoices
• Ensure invoices separate accommodation from non-recoverable items
• Train travellers to collect and upload invoices to expense systems immediately
• Verify long-stay bookings (>28 nights) to confirm whether VAT-exempt status applies
• Centralise VAT reclaim with finance or a specialist to reduce errors
• Maintain audit-ready documentation for HMRC compliance
• Confirm supplier VAT status and invoice templates before contracting

Official Guidance

• HMRC VAT Notice 709/3: Hotels and Holiday Accommodation
• GOV.UK: Reclaim VAT on Business Expenses
• HMRC VAT Refunds: Non-UK Businesses

Next Steps: Booking a Corporate Serviced Apartment

Booking corporate serviced accommodation in the UK can be a smart and tax-efficient choice for business travellers. By understanding how VAT applies to different types of serviced apartments, and taking advantage of reduced rates on long stays, companies can significantly optimise their accommodation budgets while ensuring compliance with HMRC rules.

If your organisation regularly books serviced apartments and wants to simplify VAT reclaim, invoicing, and long-stay management, get in touch with Checkin Apartments. Our team specialises in corporate accommodation solutions across the UK — offering transparent, VAT-inclusive rates, flexible booking terms, and full support with VAT documentation for every stay.