Can You Claim VAT Back? A Practical Guide for UK Businesses

1. Yes, You Can Claim VAT Back—If You’re VAT Registered

If your business is registered for VAT with HMRC, you can reclaim VAT on goods and services used exclusively for business purposes. This process is known as input VAT recovery.

2. What VAT Can You Claim Back?

You can reclaim VAT on:

  • Office supplies and equipment
  • Raw materials and stock
  • Business travel (train tickets, fuel, hotels)
  • Marketing and professional services
  • Some vehicle and maintenance costs
  • Utilities and rent (if VAT charged)

3. What VAT Can’t You Reclaim?

You cannot claim VAT on:

  • Personal expenses
  • Business entertainment (e.g., client meals)
  • Non-VAT-registered supplier invoices
  • Goods/services used for both personal and business (unless apportioned)
  • Purchase of cars (in most cases unless solely for business)

4. Who Can Reclaim VAT?

To reclaim VAT, you must:

  • Be VAT registered with HMRC
  • Have a valid VAT invoice showing the supplier’s VAT number
  • Use the goods or services wholly or partly for business
  • Keep records for at least 6 years

5. How to Claim VAT Back

  1. Register for VAT with HMRC if your taxable turnover exceeds £90,000
  2. Keep accurate records and valid VAT invoices
  3. Submit VAT returns (usually quarterly) through Making Tax Digital (MTD)-compliant software
  4. Enter the input VAT (on purchases)
  5. Deduct input VAT from output VAT (what you’ve charged customers)
  6. Reclaim the difference or pay what’s owed

6. Can You Claim VAT on Past Purchases?

Yes, you can reclaim:

  • Up to 4 years for goods still used by the business
  • Up to 6 months for services
  • The purchases must have been for business use before you were VAT registered

7. Claiming VAT on Vehicles and Fuel

  • You can reclaim VAT on commercial vehicles (vans, trucks)
  • Reclaiming VAT on cars is restricted unless used 100% for business
  • For fuel, you can reclaim VAT if you keep mileage records or use the fuel scale charge

Frequently Asked Questions

1. Can I claim VAT back if I’m not VAT registered?
No. Only VAT-registered businesses can reclaim VAT.

2. How do I get a VAT invoice?
Request one from the supplier if not provided. It must include their VAT number and breakdown of VAT charged.

3. Can sole traders reclaim VAT?
Yes, if they are VAT registered and the expenses are business-related.

4. How often can I claim VAT back?
Usually every quarter, when submitting your VAT return.

5. Is VAT automatically refunded?
If your input VAT is more than your output VAT, HMRC will issue a refund. It’s not automatic—you must claim it via your return.

6. Can I reclaim VAT on international purchases?
Only under certain conditions. Check if the supplier charged UK VAT or if you need to use the reverse charge mechanism.

Conclusion

So, can you claim VAT back? Yes—if you’re VAT registered and your purchases are for business use. Understanding your VAT rights helps save money and stay compliant. Keep thorough records, use proper invoicing, and file your returns correctly to get the VAT you’re entitled to.

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