Reclaiming VAT

Once you are registered as a VAT business, you’re able to claim back the VAT on goods and services you have purchased for use in your business. This is something that we commonly find that our clients make mistakes with what they can reclaim and what they can’t. Use this blog as either a quick refresh or a checklist on what you can claim. If you have any further troubles – we can help you with this! If you are entering your invoices yourself – being more accurate with this could keep your bookkeeping hours down.

What you can’t reclaim VAT for:

  • Anything that is 100% private use
  • Goods and services your business uses to make VAT-exempt supplies
  • Entertaining business clients – including food and drink, accommodation

What you can claim VAT on:

  • Travel – e.g. train, parking tickets
  • Entertaining employees
  • Food – e.g. food whilst on business
  • Accommodation – if it is required as part of business

As a rule, the easiest way to remember is that any expenses that are for business purposes are allowable, unless its entertaining the client. Any expenses that go towards employees can be reclaimed as its seen as a benefit.

What does a VAT invoice look like?

Not all invoices are VAT invoices – as some businesses may not be registered for VAT, which means that there will be no VAT to reclaim. Therefore, its important to distinguish between those invoices that are and aren’t. Some easy pointers are listed below.

The VAT invoice will have:

  • The suppliers name, address and VAT registered number
  • The supplier’s invoice number
  • The name and address to who the goods are supplied
  • Date and time of the supply
  • A description of the goods or services supplied
  • The total amount payable for the whole invoice excluding VAT

What doesn’t count as a VAT invoice?

  • Supplier statement
  • Delivery note
  • Request for payment

So to summarise, make sure you check that you have a valid VAT invoice, store this in VAT compatible software, and make sure that the purchase was for business purposes.

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