1. Yes, You Can—If You’re VAT Registered
If your business is VAT-registered in the UK, you can claim VAT back on materials and supplies used exclusively for business purposes. This includes goods purchased for resale, manufacturing, or use in your services.
2. What Materials Qualify?
You can reclaim VAT on:
- Raw materials used in production
- Items for resale (e.g., stock or inventory)
- Equipment and tools used in your business
- Construction materials (if you’re in the building trade)
- Office supplies like stationery or tech
3. What You Can’t Claim VAT On
Even if you’re VAT-registered, you cannot claim VAT back on:
- Materials used for non-business or personal use
- Items with no VAT charged (e.g., zero-rated goods)
- Purchases from non-VAT registered suppliers
- Some entertainment expenses or vehicles (unless solely for business use)
4. What You Need to Reclaim VAT
To claim VAT on materials, ensure you have:
- A valid VAT invoice (not just a receipt)
- The supplier’s VAT registration number
- Proof the item is used for business
- Accurate VAT records for your return
5. How to Reclaim VAT
- Register for VAT with HMRC (if turnover exceeds £90,000 or voluntarily)
- File VAT Returns quarterly (or annually) through your HMRC VAT account
- Include VAT paid on materials in your input tax section
- Offset input VAT against output VAT (what you’ve charged customers)
- Reclaim the difference or pay what’s owed
6. Can You Claim VAT on Past Purchases?
Yes, you can claim:
- Up to 4 years on goods still in use
- Up to 6 months on services
This applies after VAT registration, provided the materials were for business use.
Frequently Asked Questions
1. Can I claim VAT if I’m not VAT registered?
No. Only VAT-registered businesses can reclaim VAT.
2. Can sole traders reclaim VAT?
Yes, if they are VAT-registered and the materials are for business use.
3. What if I use the materials for both business and personal use?
You can only claim the business-use portion of the VAT.
4. Can I claim VAT on imported materials?
Yes, but you must pay import VAT and reclaim it through your VAT return, using the correct documentation.
5. Do I need original invoices?
Yes, valid VAT invoices are required to support your claim.
6. What happens if I claim VAT incorrectly?
HMRC may charge penalties or interest for incorrect claims, so always keep thorough records.
Conclusion
If you’re VAT-registered and use materials solely for business, you can claim VAT back—saving money and improving cash flow. Keep accurate records, submit proper invoices, and file your returns on time to stay compliant and benefit fully.