How Can I Claim VAT Back? Complete UK Guide

Table of Contents

1. Introduction

If you’re running a business in the UK, you may be wondering: how can I claim VAT back? Value Added Tax (VAT) is charged on most goods and services, but if your business is VAT-registered, you can reclaim VAT paid on eligible business expenses. This helps reduce costs and improve cash flow.

2. Who Can Claim VAT Back?

You can claim VAT back if:

Your business is VAT-registered with HMRC.
You’ve bought goods or services for business use.
You have a valid VAT invoice or receipt.

3. What VAT Can Be Claimed Back?

Business Purchases: Office supplies, equipment, and stock.
Travel Expenses: Fuel, train tickets, or flights for business trips.
Services: Professional fees (e.g., accountants, consultants).
Utility Bills: If used for business purposes.
Imports: VAT paid on goods brought into the UK.

4. What VAT Cannot Be Claimed Back?

Personal expenses not related to business.
Client entertainment (e.g., meals, events).
Non-business use of goods or services.
Some cars, unless used only for business.

5. How to Claim VAT Back

Step 1: Register for VAT

Apply via HMRC if your turnover exceeds £85,000 (or voluntarily register if below).

Step 2: Keep Records

Save VAT invoices, receipts, and import/export documents.

Step 3: Submit VAT Returns

File VAT returns (usually every 3 months).
Report total sales, purchases, and VAT paid.

Step 4: Claim Input Tax

Deduct the VAT you’ve paid (input tax) from the VAT you’ve collected (output tax).
If input tax is greater, HMRC refunds the difference.

6. Special VAT Refund Cases

Pre-Registration Expenses: You may claim VAT on goods bought up to 4 years before registering, if still used for business.
EU and Overseas VAT Refunds: Special rules apply for international purchases.
Flat Rate Scheme Users: Generally can’t reclaim VAT on purchases, except certain capital assets.

7. Example of Claiming VAT Back

You sell products and charge customers £5,000 + £1,000 VAT.
You buy supplies costing £2,000 + £400 VAT.
VAT collected: £1,000. VAT paid: £400.
VAT due to HMRC = £1,000 – £400 = £600.

8. Mistakes to Avoid

Claiming VAT without valid invoices.
Mixing personal and business expenses.
Missing VAT deadlines (risk of penalties).
Forgetting to adjust claims if goods are partly for personal use.

Frequently Asked Questions

1. How can I claim VAT back as a small business?
Register for VAT, keep receipts, and submit quarterly VAT returns.

2. Can I claim VAT back if I’m not VAT-registered?
No, only VAT-registered businesses can reclaim VAT.

3. How long does it take to get a VAT refund?
Usually within 10 working days after submitting a return.

4. Can I claim VAT on petrol?
Yes, but only for business-related travel.

5. Can I claim VAT back on a laptop used for work and personal use?
Yes, but only the business-use percentage can be claimed.

6. How far back can I claim VAT?
Up to 4 years for goods and 6 months for services before VAT registration.

Conclusion

To answer how can I claim VAT back—you must be VAT-registered, keep valid records, and submit VAT returns through HMRC. By claiming VAT on eligible business expenses, you reduce costs and improve cash flow. Careful record-keeping and timely filing ensure you receive refunds without penalties.