Reclaiming VAT in the UK

Reclaiming VAT in the UK

With decades of experience in helping businesses across all sectors with all aspects of reclaiming Value Added Tax (VAT), The VAT People is best placed to assist you in ensuring you are maximising VAT recovery on your operations within the UK.

Reclaiming VAT on every item or service your business purchases requires a thorough approach, and it can be difficult without expert support. However, without making this effort, your company is effectively losing money. The process can be even more complicated if you need to reclaim VAT paid incorrectly to HMRC because you are owed a VAT refund. You may risk not only financial losses but the legal consequences that can arise when you make mistakes on your VAT return.

Expert support can help you to work out how much VAT you are owed, identify which goods and services are eligible for VAT refunds, calculate the correct VAT split, and file your returns. By taking advantage of this suite of services, you can put your business interests first and ensure that you maintain legal compliance when you claim back all the VAT you are owed.

The VAT People has helped hundreds of firms to decipher this complicated set of regulations and requirements, and we will provide the guidance you need in a manner that is both practical and easy to understand. Contact us today by calling 0161 477 6600 or complete an online enquiry form and we will be in touch at a time that is convenient for you.

How we can help you

Our knowledgeable VAT consultants are on hand to guide you through the process of reclaiming VAT on goods and services in the UK. 

Businesses can usually reclaim the VAT paid on goods and services purchased for use within the business. Those purchases made for personal or private use are only subject to VAT recovery on the business proportion of the transaction. 

For instance, regarding members of staff who work from home, if the office takes up 20% of the floor space in their property, they are entitled to reclaim 20% of the VAT on their utility bills. Records, as well as any relevant VAT invoices, must be kept to support any claims that are made. 

The VAT People is on hand to help businesses understand their obligations relating to VAT recovery, explaining which goods and services are eligible for recovery, as well as where partial exemption applies. 

The VAT People also provides assistance to businesses relating to reclaiming VAT on overseas expenditures. Find out more in our guide to reclaiming VAT overseas

What business expenses are eligible for a VAT refund?

You can reclaim VAT on many goods and services bought for a business, and on the business proportion of any personal items purchased for both business use and personal use. However, it is important to carefully research the regulations that apply (or work with an expert VAT adviser) to avoid making any errors in your VAT return.

The most common assets for which you can reclaim VAT include:

  • Business trips and employee travel expenses
  • Mobile phone calls
  • Utility bills
  • A new car or commercial vehicle that is only used for business journeys
  • Business mileage and fuel costs
  • Office furniture

There are certain rules that may apply in specific cases. For example, in some cases, an employee's contract should state that an asset can only be used for business purposes, in order for your organisation to qualify for a VAT refund. A sales invoice for any purchases should clearly state the VAT amount to ensure the purchase is eligible. These rules will also differ if you pay a flat rate of VAT, which can make the process of filing your VAT return complicated without professional support.

When am I unable to claim back VAT?

VAT usually cannot be reclaimed on the following: 

  • Anything that is solely for personal use
  • Goods and services used by your business to make VAT-exempt supplies
  • Business entertainment 
  • Goods sold to your business using one of the second-hand margin schemes 
  • Business assets transferred to you as a going concern

There are also special rules for reclaiming VAT on the following: 

  • Individual computers and single pieces of computer equipment costing £50,000 or more before VAT
  • Aircraft, ships and boats costing £50,000 or more before VAT
  • Land and buildings costing £250,000 or more before VAT

FAQs for VAT-Registered Businesses

Is there a time limit for claiming input tax?

UK VAT-registered businesses are able to recover input tax incurred in the course of making onward taxable supplies - this is done through the submission of VAT returns. In the event VAT is not claimed in the proper period, a late claim can be made. There are various adjustment methods that are dependent on the value of input tax due to be reclaimed outside the correct period. 

There is a four-year time limit for correcting errors, such as in relation to the recovery of input tax. Applying for VAT repayments can be a lengthy and arduous process, but it is your right to claim input VAT incurred in relation to the provision of taxable supplies. For more advice on this, call our free helpline o read this case study for context on a situation that might be similar to yours.

Contact Us

Speak to The VAT People today about how your business could benefit from reclaiming VAT on relevant goods and services. 

Contact us by calling 0161 477 6600 or complete an online enquiry form and we will be in touch at a time that is suitable for you.