Guides · Cost
Long-stay accommodation tax: the 28-night threshold
Published 5 June 2026 · By Ali Hassan, Direct Bookings Lead · 8 min read
TL;DR
A continuous stay of 29 nights or more in the same UK serviced apartment triggers a reduced-VAT treatment under HMRC’s long-stay accommodation rules. Effective VAT drops from 20 % to roughly 4 % from night 29 onwards. This is not a discount the operator can choose to give — it’s a statutory adjustment. To qualify, the booking must be a single, continuous stay for the same guest in the same unit. Splitting the same trip across two reservations forfeits the relief.
The rule, exactly
UK VAT Notice 709/3 — “Hotels and holiday accommodation” — sets out a long-stay treatment commonly called the “28-day rule”. Past the 28-night mark of a continuous stay, the supply value attributable to facilities (cleaning, reception, services) stays VAT-able, but the value attributable to the room itself becomes exempt. In practice operators apply a ratio that brings effective VAT on the nightly rate to roughly 4 % from night 29 onwards.
The Notice has been in force since 1995 in substantially this form. It is not new, not optional, and not negotiable — but it is widely under-claimed because procurement teams don’t always know it exists, and operators don’t always apply it automatically.
What it’s worth in money
Take a typical Central London serviced apartment at £180/night including 20 % VAT.
| Stay length | Headline rate/night | Effective VAT | Total tax cost |
|---|---|---|---|
| 14 nights | £180 | 20 % throughout | £420 |
| 28 nights | £180 | 20 % throughout | £840 |
| 42 nights | £180 | 20 % then ~4 % from N29 | £884 |
| 84 nights | £180 | 20 % then ~4 % from N29 | £1,260 |
Compare that 84-night line against a naïve 20 %-throughout calculation (£2,520) and the relocation is roughly £1,260 cheaper in tax alone. That gap widens at higher nightly rates and longer stays — a 6-month corporate posting at £250/night saves around £4,500 in VAT versus the equivalent hotel booking, where the relief doesn’t apply because rooms are typically rebooked rather than continuously occupied.
What HMRC wants to see
- One booking, one apartment, one guest. A 60-night stay across two adjacent flats does not qualify even if the guest is the same. Procurement should book the whole stay in one reservation.
- Continuous occupation.If the guest leaves for a week and returns, the clock restarts. Brief weekends home (Friday evening to Sunday evening) generally don’t break the clock, but anything beyond a few days does.
- An invoice that shows the split. The operator’s invoice should show the standard-rated portion and the exempted portion separately. If you’re a finance manager reviewing serviced-apartment invoices and don’t see this split, ask the operator to reissue.
- Same legal entity throughout. If a guest’s employer changes mid-stay or the invoice payer switches companies, the continuous-stay test can be questioned. Document any change in writing.
How to structure the booking
- Book the full estimated stay up-front, not week-by-week. Most operators will hold the rate for a defined window and bill monthly in arrears.
- Ask the operator in writingif they apply the 28-night HMRC rule automatically. If they say “no” or “we don’t do that”, they should — push back or pick a different operator.
- Confirm the cancellation/early-departure terms separately. Operators usually need at least 7 days notice for an early departure to keep the relief intact.
- Get the invoice issued at month-end, not stay-end. Long stays span tax periods; monthly invoices make the VAT split easier to follow.
Common mistakes
- Splitting the stay between two flats for “variety”. Costs the relief. If the guest needs a different neighbourhood for the second month, take the hit or accept the standard-rated VAT.
- Booking through an OTA that won’t issue a proper invoice.Booking.com’s standard guest invoice doesn’t break out the long-stay split. Book direct or via a corporate travel platform that does.
- Assuming the discount is the same as the relief.Operators often quote a discounted nightly rate for stays over 28 nights; that’s a commercial discount, not the VAT relief. You can have both at the same time.
How Staylio handles it
Every Staylio long-stay booking is invoiced monthly with the standard-rated portion and the exempted portion shown separately, so your finance team has a clean audit trail. If you’re a corporate procurement team and you’d like a worked example for a specific stay length — 4 weeks, 6 weeks, 12 weeks — WhatsApp Ali on +44 7375 621453 or email hello@staylio.london with your dates and apartment size. We’ll send a per-night and per-month breakdown showing what your finance team will see on the invoice.
See also our corporate stays page for monthly billing on PO terms.