Hotel Accounting Services: What a Hotel Really Needs

Introduction

Most hotel files reach us in the same state. The bookkeeping is up to date, the bank is reconciled, and the VAT return went in on time. Yet the owner still can’t say which department made money last month, why the guest ledger on the balance sheet is three times what it should be, or whether the £18,000 of deposits held for next summer is cash they can spend.

That gap is the difference between bookkeeping and hotel accounting. A hotel is several businesses under one roof. There is a rooms business that can sell each night only once, a food and beverage business with restaurant margins, and often a bar, events, a spa or a car park. Behind them sits a building that needs constant capital spending. The hotel trades around the clock, takes money before and after each stay, and pays a seasonal team under some of the most closely watched payroll rules in the UK.

We prepare hotel accounts on behalf of the UK accountancy practices we support, from small inns to hotels with several trading departments. This guide sets out what a hotel’s finance function actually needs: how hotel finance differs, the night audit and daily revenue posting, the guest, city and deposit ledgers, departmental reporting, payroll, VAT and year-end. It finishes with what to outsource first.

If you are a practice with hotel clients, or an owner wondering whether your hotel accountant is giving you the full picture, this is the checklist we work from.

How hotel finance differs

Hotel accounting services UK practices offer often look like restaurant bookkeeping with rooms added on. They aren’t. Four features make a hotel’s books different from any other hospitality business, and each one changes what the accounts need to do.

What is different	What it means for the books
Revenue is recorded by the property management system (PMS), not a till	Daily revenue is posted from the night audit reports. The bank only confirms what the PMS has already recorded
Money arrives before, during and after the stay	Three sub-ledgers (guest, city and deposit) that must agree to the general ledger every month
Several trading departments	A departmental profit and loss account, with revenue, cost of sales and payroll for each department, down to gross operating profit
Seasonal and capital-heavy	Cash flow planned around the season, and a repair-or-capital decision on every refurbishment invoice

The PMS is the heart of it. Systems such as Oracle Opera, Guestline and Mews hold every reservation, guest folio and payment. Restaurant and bar sales from the EPOS are usually charged to a guest’s room through an interface. When the general ledger is built from bank receipts instead of PMS reports, the accounts can’t show revenue by department, can’t separate deposits from income, and can’t tell the owner what is still owed by guests and companies.

That is why a hotel accountant UK owners can rely on starts with the PMS reports, not the bank statement. Everything else in this guide follows from that.

Night audit and daily revenue posting

The night audit closes the hotel’s business day in the PMS, and its reports are the source documents for the day’s revenue. It posts each in-house guest’s room charge and package elements, checks room status against the folios, balances payments by type, processes no-shows, and rolls the system to the next date.

The reports to keep every day

Whatever the PMS calls them, these are the reports the accounts are built from:

Daily revenue report: rooms, food and beverage and other revenue with VAT, plus occupancy, average daily rate and RevPAR.
Ledger summary: opening balance, charges, payments, transfers and closing balance for the guest, city and deposit ledgers.
Payments by method: each card type, cash, bank transfer and OTA virtual card. This is the bridge to the card clearing accounts.
Allowances and rebates: every rate change or adjustment made after posting, and who approved it.
No-shows and cancellations: retained deposits and guarantee charges.
EPOS outlet reports: restaurant and bar sales, split between payments at the till and charges to rooms.

Turning the reports into a journal

Charges posted to guest folios are credited to revenue and VAT, and debited to the guest ledger control account. Payments taken at the desk credit the guest ledger and debit card clearing or cash. When a guest checks out to a company account, the balance moves from the guest ledger to the city ledger. Deposits received for future stays are credited to the deposit ledger, then transferred to the guest’s folio on arrival. The card side then works exactly as we describe in our guide to EPOS reconciliation, with each acquirer cleared against its settlement report.

Split the packages before you post

Bed and breakfast and dinner, bed and breakfast rates have to be split between rooms and food and beverage at an agreed internal value, set up in the PMS package configuration. Without that split, rooms revenue is overstated and the restaurant looks as if it serves breakfast for free. The split matters for VAT too, because the meal element is one of the figures needed when the long-stay rule applies.

The daily controls

Check the allowances report every day. A rate cut from £150 to £90 because a guest complained may be a sensible decision, but it should never be an unapproved one. Compare the PMS ledger closing balances with the general ledger control accounts at least weekly. And check that the EPOS to PMS interface ran: when it fails, restaurant charges never reach the guest’s folio, and they are lost at checkout.

The city and deposit ledgers

A hotel collects money before the stay, during it and after it, so it runs three sub-ledgers where most businesses run one. Each has its own control account in the general ledger, and each should agree to the PMS at every month-end.

Ledger	What it holds	A healthy balance	Warning sign
Guest ledger	Charges and payments on in-house guests’ folios	Roughly the unpaid charges of the guests in-house that night	Balances for guests who have already checked out
City ledger	Amounts billed after checkout: company accounts, agents, OTA virtual cards and function invoices	Mostly current, within the agreed credit terms	Old OTA and company balances that nobody is chasing
Deposit ledger	Advance payments for future stays and events	Agrees to the PMS list of future bookings holding deposits	Deposits for dates that have already passed

The guest ledger

The guest ledger should be small, because guests settle when they leave. David Lund, a hotel finance coach and HFTP-certified hotel accounting executive, describes reviewing a 50-room hotel whose guest ledger stood at over $40,000. Even fully booked on the last night of the month, he reckoned it should have been nearer $7,500. The difference was old folios nobody had closed. We see the same pattern on UK files: guests checked out with balances left open, transfers to company accounts never made, and the gap quietly overstating debtors.

The city ledger

The city ledger is the hotel’s credit control. Company accounts, travel agents, wedding and function invoices, and virtual cards issued by online travel agents all sit here until the money arrives. Age it every month and chase it like any other debtor ledger. Virtual cards deserve particular attention, because they can usually only be charged from a set date. An unused virtual card balance is cash the hotel has earned and not yet collected.

The deposit ledger

An advance deposit is not income. It is money held for a stay that hasn’t happened yet, so it is a liability until the guest arrives or the booking lapses under its terms. The VAT, however, does not wait. HMRC’s hotel notice (VAT Notice 709/3) treats most deposits as advance payments, with VAT due in the return period in which they are received. The VAT on next summer’s weddings is therefore paid long before the revenue appears in the accounts, and the cash flow forecast needs to reflect that.

When a deposit is kept because a guest cancels or doesn’t turn up, HMRC’s position is that the VAT already accounted for stays due. It can only be reduced to the extent the money is refunded. Make sure the no-show report is processed every day, so deposits for past dates are released from the ledger rather than sitting there indefinitely.

Departmental structure

A hotel’s profit and loss account only becomes useful when it is laid out by department. The industry standard for that layout is the Uniform System of Accounts for the Lodging Industry (USALI). Its 12th Revised Edition has an adoption date of 1 January 2026. Among other changes, it adds schedules for full-time equivalent staff by department and for brand and operator costs, and renames the utilities schedule Energy, Water and Waste.

An independent UK hotel doesn’t have to follow USALI. Franchise agreements, management contracts and lenders often require it, though, and even a 20-bedroom hotel benefits from the same basic shape, because it makes benchmarking possible.

Level	What sits there	Examples
Operated departments	Revenue, cost of sales, payroll and direct expenses for each department	Rooms; food and beverage; spa, parking and other operated departments
Undistributed operating expenses	Costs that support the whole hotel	Administration, IT, sales and marketing, property operations and maintenance, energy, water and waste
Gross operating profit (GOP)	Departmental profit less undistributed expenses	The figure owners, operators and lenders look at first
Below GOP	Management fees and non-operating costs	Rent, business rates and insurance, then EBITDA

The numbers owners actually read

Hotel management accounts should carry a short set of operating measures alongside the profit and loss account:

Occupancy is rooms sold divided by rooms available.
Average daily rate (ADR) is rooms revenue divided by rooms sold.
RevPAR is rooms revenue divided by rooms available.
GOPPAR is gross operating profit divided by rooms available.
Payroll percentage is each department’s payroll as a share of its revenue.

Take a 40-room hotel in September. It has 1,200 room nights available and sells 960, so occupancy is 80%. Rooms revenue of £115,200 gives an ADR of £120 and a RevPAR of £96. Those three numbers, compared with last September and with the budget, tell an owner more in ten seconds than a statutory profit and loss account does in ten minutes.

Payroll by department

The most common gap we see in smaller hotel accounts is a single line for wages. If housekeeping, kitchen, restaurant, front office and maintenance staff are all on one payroll cost centre, no department’s profit means anything. Set up payroll cost centres to match the departments, and allocate shared roles, such as a duty manager, on a documented basis.

Payroll and seasonal staffing

Payroll is usually a hotel’s biggest operating cost, and it is high-volume, seasonal and closely regulated. These are the figures hotel payroll services UK employers need to be working with for 2026/27:

Item	From April 2026
National Living Wage, age 21 and over	£12.71 an hour (GOV.UK)
National Minimum Wage, age 18 to 20	£10.85 an hour
Under 18 and apprentices	£8.00 an hour
Accommodation offset	£11.10 a day, £77.70 a week (GOV.UK)
Statutory Sick Pay	From the first day of absence; the lower of £123.25 a week or 80% of average weekly earnings (Acas)
Employer National Insurance	15% above £5,000 a year; Employment Allowance up to £10,500 (Ross Martin)

Live-in staff and the accommodation offset

Accommodation is the only benefit in kind that counts towards the minimum wage. If a hotel charges live-in staff more than the offset, the excess reduces their pay for minimum wage purposes. This is where well-meaning hotels get caught.

Take a 20-year-old room attendant paid £10.90 an hour for a 40-hour week, which is £436.00. That looks safely above the £10.85 rate. But the hotel charges £15 a day for staff accommodation. The excess over the offset is £3.90 a day, or £27.30 for the week. Pay for minimum wage purposes falls to £408.70, which is £10.22 an hour. The hotel is underpaying, even though the hourly rate on the contract is above the minimum. Run this check every pay period for every live-in employee.

Seasonal starters and leavers

A seasonal hotel can take on and lose dozens of staff in a few weeks. Each starter needs a starter checklist or P45, each leaver needs a P45, and the RTI submission has to go in on or before payday. A few points matter more in hotels than elsewhere:

Age-based rates. Run minimum wage rates by date of birth, and update them on birthdays, not at the next review.
Employer NICs on young staff. No employer NICs are due on earnings up to the upper secondary threshold for employees under 21 and apprentices under 25, provided the right category letter is used.
Holiday pay. For irregular-hours and part-year workers, holiday for leave years starting on or after 1 April 2024 can be accrued at 12.07% of hours worked and paid as rolled-up holiday pay.
Pensions. Auto-enrolment can be postponed for up to three months, which can suit short seasonal contracts, as long as the correct notice is given.

Sickness and tips

Since 6 April 2026, Statutory Sick Pay has been payable from the first day of absence, with no lower earnings limit. For a workforce built on short shifts, that changes the cost of a one-day absence, and budgets should reflect it.

Tips and service charge run through the tronc or payroll, must reach staff in full, and do not count towards the minimum wage. We cover the mechanics, from card tips to the tronc’s National Insurance position, in our EPOS reconciliation guide.

What is coming next

The Employment Rights Act 2025 is still being phased in. Lewis Silkin notes that new guaranteed hours and shift scheduling regimes are expected next year and will hit hospitality hard. Hotels that run zero-hours contracts should be reviewing their rota and payroll systems now, not when the rules land.

VAT complexity

Almost everything a hotel sells is standard-rated at 20%, and the temporary hospitality rate ended on 31 March 2022. The exceptions are where hotel VAT accounting goes wrong, and most of them come straight from HMRC’s hotel notice:

Supply	VAT treatment
Rooms, food and drink	Standard-rated
Stays of more than 28 days by the same individual	Reduced value rule from day 29
Deposits, booking fees and retained deposits	VAT due when the payment is received; it stays due if the deposit is kept
Card guarantees charged after a no-show	VAT due when the charge is taken
Meeting room hire without catering	Exempt, unless the hotel has opted to tax
Meeting room with overnight stay and meals for one price	Separate supplies: room hire exempt (unless opted to tax), meals and accommodation standard-rated
Wedding packages	A single standard-rated supply
Accommodation and meals that staff pay for, including through salary sacrifice	VAT due on what staff pay
Genuinely optional service charge and tips	Outside the scope of VAT

The 28-day rule in practice

When the same person stays continuously for more than 28 days, VAT from day 29 is charged only on the part of the price that isn’t for accommodation. Meals and other services are taxed in full, and at least 20% of the accommodation charge must be treated as facilities.

Take a contractor staying room-only at £700 a week before VAT. For the first four weeks, the VAT is £140 a week. From day 29, VAT is due only on 20% of the charge, which is £140, so the VAT falls to £28 a week. The full £700 still goes in box 6 of the VAT return. The rule doesn’t apply where a company block-books a room for a rotation of staff who each stay less than 29 days. It does apply to individuals placed by a local authority, from the 29th day of each person’s stay.

Meeting rooms and partial exemption

Room hire without catering is an exempt supply unless the hotel has opted to tax. Tea, coffee and biscuits don’t change that, but a buffet or a meal is a separate standard-rated supply. Exempt sales mean the hotel is partly exempt, so some input VAT may not be recoverable. Many hotels fall within the de minimis limits, but the calculation should be done every year. Opting to tax the building makes room hire standard-rated and removes the problem, but it has long-term consequences, including on any future sale of the hotel, so take advice before doing it.

OTA commission and the reverse charge

Booking.com invoices its commission from the Netherlands without UK VAT. A VAT-registered hotel accounts for the VAT itself under the reverse charge, as output tax and input tax on the same return. For a fully taxable hotel, the net effect is usually nil, but the entries still have to be made, a point that comes up regularly on AccountingWEB. Where an online travel agent collects the money from the guest and pays the hotel a net rate, read the contract before posting anything. Who the hotel is supplying, the guest or the agent, decides what VAT is due.

Gift vouchers

Hotels sell a lot of vouchers. One for a specific experience, such as a night’s bed and breakfast or an afternoon tea, is usually a single-purpose voucher, with VAT due when it is sold. A monetary voucher to spend anywhere in the hotel is usually multi-purpose, with VAT due when it is redeemed. The voucher liability needs its own control account and a register that agrees to it.

Our VAT services build these checks into every hotel return we prepare.

Year-end and asset accounting

For most hotels, the next year-end is a bigger job than usual. Changes to FRS 102, capital allowances and business rates all land in the same twelve months.

FRS 102: leases and revenue

The FRS 102 amendments apply to accounting periods beginning on or after 1 January 2026. For a hotel with a 31 December year-end, the first accounts affected are those for the year ending 31 December 2026.

Leases. Most leases now come onto the balance sheet as a right-of-use asset and a lease liability, with exemptions for short-term and low-value leases. For a leasehold hotel, this is a large change. Rent is replaced by depreciation and interest, so EBITDA rises, and the balance sheet grows. Menzies points out that hospitality is particularly exposed because of its reliance on long leases, and that loan covenants may be affected. Start gathering the lease data now: term, break clauses, rent reviews, payments and a discount rate.

Revenue. A new five-step model applies. Packages that bundle a room, dinner and a spa treatment will need their price allocated across each element. Deposits, vouchers and loyalty schemes need the same thought.

The changes apply to small companies using Section 1A. Micro-entities using FRS 105 get the new revenue model but not the lease changes.

Capital allowances on refurbishment

Refurbishment is the biggest tax lever most hotels have, and the most often wasted. Every refurbishment needs its invoices analysed into repairs, which are deductible as revenue costs, plant and machinery, integral features, and building work that may qualify for the structures and buildings allowance.

The rates have moved this year. A new 40% first-year allowance for new main-rate plant and machinery took effect on 1 January 2026, and the main-rate writing down allowance fell from 18% to 14% from April 2026. Companies can still claim full expensing on new main-rate plant. The 40% allowance matters most for unincorporated hotel businesses, which can’t use full expensing. The annual investment allowance still covers the first £1 million of qualifying spending, including second-hand assets.

Buying a hotel

When a hotel is bought, much of the price may relate to fixtures such as heating, lifts, kitchens and bathrooms. The value of those fixtures normally needs agreeing with the seller through a section 198 election, made within two years of completion, and the seller must have pooled the expenditure. Miss that window and the allowances can be lost for good. Bring the accountant in before contracts are exchanged, not after.

Business rates from April 2026

In England, retail, hospitality and leisure relief ended on 31 March 2026. It has been replaced by permanently lower multipliers for qualifying properties with a rateable value below £500,000, alongside a revaluation based on values at 1 April 2024. The new 15% relief for pubs and live music venues does not extend to hotels. Check each hotel’s 2026 bill against the new multiplier, and budget for transitional relief stepping down.

The hotel year-end checklist

On top of the usual year-end work, a hotel file needs these items checked:

Deposit ledger agreed to the PMS list of future bookings, with the VAT on deposits reconciled.
Charges for guests in-house on the year-end night accrued from the guest ledger.
City ledger aged, with provisions for old OTA and company balances.
Voucher liability agreed to the voucher register.
Tips liability cleared to the tronc.
Holiday pay accrued for seasonal staff.
Food, drink and minibar stock counted.

Our year-end accounts and corporation tax teams prepare these schedules, including capital allowances analyses, ready for your review.

What to outsource first

Outsource the work that is high-volume, repeatable and easy to check, and keep the decisions inside the hotel. For practices with hotel clients, and for owners weighing up hotel accounting outsourcing UK providers offer, this is the order that tends to work:

Daily revenue posting and ledger reconciliation. Night audit reports into the general ledger, card and OTA clearing, and the guest, city and deposit ledgers agreed every month. It is the highest-volume work, and everything else depends on it.
Purchase ledger and supplier reconciliations, coded by department: food, drink, linen and laundry, utilities and maintenance.
Payroll, including the tronc, seasonal starters and leavers, and the accommodation offset check every pay period.
VAT returns, with the long-stay, deposit, meeting room and reverse charge checks built in.
Monthly management accounts in a departmental format, with occupancy, ADR, RevPAR and payroll percentages.
Year-end accounts and corporation tax, including the FRS 102 lease work and the capital allowances analysis.

Keep pricing and revenue management, guest billing disputes, cash handling and approvals with the hotel. Rate allowances, write-offs and credit decisions belong to the people who know the guests.

So what does good hotel bookkeeping outsourcing look like? On the hotel files we prepare, the target is a review-ready monthly pack within five working days of month-end, with every sub-ledger agreed and every exception listed for a decision. If you are concerned about guest and payroll data leaving the building, our guide to client data security when outsourcing sets out the controls to ask any provider about.

Putting it into practice

Hotel accounting isn’t harder than other accounting. It just has more moving parts, and they move every night. Start from the PMS, keep the three sub-ledgers honest, report by department, and treat VAT, payroll and year-end as hotel-specific work rather than generic compliance. Do that, and the owner gets accounts that explain the business rather than simply record it.

For practices, this is work that moves well to an outsourced team, because the method is the same on every hotel file and the exceptions can be flagged for a decision. Our hotel bookkeeping services UK practices outsource to us cover daily revenue posting, ledger reconciliations, payroll, VAT and departmental management accounts, all prepared inside your own software and reviewed before you see them.

You can see how we support hotels, restaurants and pubs on our Hospitality page. The day-to-day work runs through our outsourced bookkeeping, and departmental reporting through our management accounts service. Our guide to hotel management accounts goes deeper into the monthly pack. Payroll and the tronc run through our payroll service, and the card side of the night audit is covered in our guide to EPOS reconciliation.

Frequently Asked Questions

General

What do hotel accounting services include?

They cover daily revenue posting from the PMS, reconciliation of the guest, city and deposit ledgers, the purchase ledger, payroll and tronc, VAT returns, departmental management accounts, and year-end accounts and tax. A good provider also handles the hotel-specific work: package allocation, OTA commission, long-stay VAT and capital allowances on refurbishments.

What does a hotel accountant do that a general bookkeeper doesn’t?

A hotel accountant works from the PMS rather than the bank statement. They keep the three sub-ledgers agreed to the general ledger, report profit by department down to GOP, and apply the hotel rules on deposits, long stays, meeting rooms and staff accommodation. A general bookkeeper can keep a hotel’s books tidy and still miss all of those.

What is USALI, and do UK hotels have to use it?

USALI is the Uniform System of Accounts for the Lodging Industry, the international standard layout for hotel financial reporting. Its 12th Revised Edition has an adoption date of 1 January 2026. UK hotels aren’t legally required to use it, but franchise agreements, management contracts and lenders often ask for USALI-style reporting, and it makes benchmarking possible.

What is GOP in a hotel?

Gross operating profit is the profit of the operated departments, such as rooms and food and beverage, less undistributed operating expenses such as administration, sales and marketing, maintenance and energy. It is measured before management fees, rent, rates, insurance and finance costs, so it shows how well the hotel is run, separately from how it is owned or financed.

How do you calculate occupancy, ADR and RevPAR?

Occupancy is rooms sold divided by rooms available. ADR is rooms revenue divided by rooms sold. RevPAR is rooms revenue divided by rooms available, which is the same as occupancy multiplied by ADR. A 40-room hotel that sells 960 of 1,200 available room nights for £115,200 has 80% occupancy, an ADR of £120 and a RevPAR of £96.

Night audit and ledgers

What is a night audit?

The night audit is the end-of-day process in the PMS. It posts room charges to each in-house folio, checks room status, balances payments, processes no-shows and moves the hotel to the next business date. Its reports are the source documents for the day’s revenue in the accounts.

What is the difference between the guest ledger and the city ledger?

The guest ledger holds the accounts of guests who are in the hotel now. The city ledger holds amounts still owed after checkout: company accounts, travel agents, function invoices and online travel agent virtual cards. When a guest checks out to a company account, the balance moves from the guest ledger to the city ledger.

What is the advance deposit ledger?

It holds payments received for future stays and events. Those deposits are a liability until the guest arrives and the deposit is transferred to their folio, or until the booking lapses under its terms. VAT on most deposits is due when they are received, not when the stay happens.

Why is the guest ledger balance on our balance sheet so high?

Usually because folios were left open after guests checked out, transfers to company accounts were never made, or deposits were posted to the wrong ledger. The guest ledger should be roughly the unpaid charges of the guests in-house on the last night of the month. A hotel finance coach writing for Hotel Online describes finding more than five times that figure on a 50-room hotel.

How should OTA bookings be recorded?

Where the guest pays the hotel, record the full room price as revenue and the agent’s commission as a cost. Where the agent collects payment and passes it on, often through a virtual card, the amount owed sits in the city ledger until the card is charged or the money arrives. On merchant-model bookings, read the contract before posting anything net, because it decides who the hotel is supplying.

VAT

What VAT rate do UK hotels charge?

Rooms, food and drink are standard-rated at 20%, since the temporary hospitality rate ended on 31 March 2022. The main exceptions are the reduced value rule for stays of more than 28 days, meeting room hire without catering, which is exempt unless the hotel has opted to tax, and tips or genuinely optional service charges, which are outside the scope of VAT.

What is the 28-day rule for hotel VAT?

When the same individual stays continuously for more than 28 days, VAT from day 29 is charged only on the part of the price that isn’t for accommodation, with at least 20% of the accommodation charge treated as facilities. It doesn’t apply to company block bookings used by a rotation of staff, as HMRC’s hotel notice makes clear.

Do hotels charge VAT on deposits and no-show charges?

Yes. HMRC treats most deposits as advance payments, with VAT due when they are received. If the guest cancels or doesn’t arrive and the hotel keeps the deposit, the VAT remains due. Where a card guarantee is charged after a no-show, VAT is due when the charge is taken.

Is there VAT on Booking.com commission?

Booking.com invoices from the Netherlands without UK VAT, so a VAT-registered UK hotel accounts for the VAT under the reverse charge. It records output tax and input tax on the same return, which normally cancel out for a fully taxable hotel. The entries still need to be made, with the net value of the commission included in boxes 6 and 7.

Is meeting room hire VAT exempt?

Room hire without catering is exempt unless the hotel has opted to tax the building. Tea, coffee and biscuits don’t change that, but a meal or buffet is a separate standard-rated supply. Wedding packages are treated differently: HMRC regards them as a single standard-rated supply.

Is a hotel service charge subject to VAT?

A compulsory service charge is standard-rated, because it is part of the price. Tips, and service charges the guest can genuinely choose not to pay, are outside the scope of VAT. Where a charge is presented as going to staff, the tipping rules require it to reach them in full.

Payroll

Can a hotel charge staff for accommodation?

Yes, but charges above the accommodation offset, £11.10 a day from April 2026, reduce pay for minimum wage purposes. Free accommodation adds the offset to pay instead. A worker paid above the minimum hourly rate can still be underpaid once an accommodation charge is counted, so the check has to be done every pay period.

Do tips count towards the minimum wage?

No. Tips, gratuities and service charges paid to workers don’t count towards the National Minimum Wage. Basic pay, adjusted for any accommodation charge, has to meet the rate on its own.

What changed for Statutory Sick Pay in April 2026?

Since 6 April 2026, SSP has been payable from the first day of sickness, and the lower earnings limit no longer applies, so lower-paid and part-time staff now qualify. The weekly amount is the lower of £123.25 or 80% of average weekly earnings, as Acas explains.

Year-end, tax and outsourcing

How do the FRS 102 changes affect hotels?

For accounting periods beginning on or after 1 January 2026, most leases go on the balance sheet and revenue follows a new five-step model. Leasehold hotels will report higher assets, liabilities and EBITDA. Packages that bundle rooms, meals and spa treatments need their price allocated across each element. Micro-entities using FRS 105 adopt the new revenue model but not the lease changes.

Can a hotel claim capital allowances on a refurbishment?

Usually, on much of it. Repairs are deductible as revenue costs; plant, machinery and integral features attract capital allowances, and building work may qualify for the structures and buildings allowance. Companies can claim full expensing on new main-rate plant. Since January 2026, a new 40% first-year allowance has helped unincorporated hotel businesses that can’t use full expensing.

How have business rates changed for hotels?

In England, retail, hospitality and leisure relief ended on 31 March 2026. Qualifying hotels with a rateable value below £500,000 now pay lower multipliers instead, and every property was revalued from 1 April 2026. The extra 15% relief for 2026/27 is for pubs and live music venues only, and does not cover hotels.

Is it safe to outsource hotel bookkeeping overseas?

It can be, if the provider can show its controls: signed NDAs, role-based access, encrypted file transfer, and GDPR-compliant processes. Ask how guest and payroll data is stored and who can see it. Our guide to client data security when you outsource lists the questions worth asking.

How much do hotel accounting services cost?

It depends on the number of rooms and departments, the PMS and transaction volume, payroll headcount, and whether a tronc is running. A hotel with three trading departments is a bigger job than a café group with the same turnover. We price each client after seeing a real file, and a free trial is the quickest way to a firm number.

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Sources and further reading

This article is general guidance on UK hotel accounting, VAT, payroll and reporting rules as at October 2026. It is not advice on any individual business’s circumstances.

Hotel Accounting Services: What a Hotel’s Finance Function Actually Needs