Small Business Accountants

How do I claim back VAT?

Reclaiming VAT allows your business to recover tax paid on eligible purchases. You must be VAT-registered and submit claims through Box 4 of your VAT return. Valid VAT invoices are essential, and you should keep detailed records showing business proportion calculations. Pre-registration VAT can also be claimed on goods within four years and services within six months.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 1

Reclaiming VAT on business expenses - GoForma Tax Guides | UK Accountants & Tax Advisors

Key takeaways

{'heading': 'Claim through your VAT return', 'description': 'Input VAT on business purchases is reclaimed by entering the total in Box 4 of your VAT return, submitted through your MTD-compatible software.'}
{'heading': 'Keep valid VAT invoices', 'description': "Every claim must be backed by a valid VAT invoice showing the supplier's name, address, VAT registration number, and the VAT amount charged on each item."}
{'heading': 'Some expenses are blocked', 'description': 'You cannot reclaim VAT on business entertainment costs or purchases that are not used for your taxable business activities, so check each expense carefully.'}
{'heading': 'Pre-registration VAT is reclaimable', 'description': 'Goods bought up to four years before VAT registration and services purchased up to six months before registration can be included in your first VAT return.'}
{'heading': 'MTD for VAT is now mandatory', 'description': 'All VAT-registered businesses must use Making Tax Digital compatible software to keep records and file VAT returns, regardless of their turnover level.'}

You can reclaim VAT by submitting a VAT return.

You need to have valid VAT invoices, keep records as proof for your claim and show how you calculated the business proportion of a purchase.

Frequently asked questions

Do I need to be VAT-registered to claim back VAT?

Yes, only VAT-registered businesses can reclaim input VAT on their purchases. If your taxable turnover exceeds the VAT registration threshold, you must register with HMRC. Voluntary registration below the threshold is also possible and lets you recover VAT on business costs. Without a valid VAT registration, you cannot submit VAT returns or claim any refunds on purchases you have made.

Where do I enter my VAT reclaim on the VAT return?

You enter the total input VAT you wish to reclaim in Box 4 of your VAT return. This box is specifically designated for VAT charged on your business purchases and expenses. Your MTD-compatible accounting software will usually calculate this figure automatically from the purchase invoices you have recorded. Always check the total before submission to avoid errors that could trigger an HMRC enquiry.

What counts as a valid VAT invoice for reclaiming VAT?

A valid VAT invoice must include the supplier's name, address, and VAT registration number, along with the invoice date, a unique invoice number, and a description of the goods or services supplied. It must also show the net amount, the VAT rate applied, and the total VAT charged. Without these details, HMRC may reject your claim, so always request a full VAT invoice from suppliers.

Can I reclaim VAT on expenses before I registered for VAT?

Yes, you can claim pre-registration VAT in certain circumstances. For goods still held or used in your business at the point of registration, you can go back up to four years. For services, the time limit is six months before your registration date. The goods or services must relate to your current taxable business activities. Include these amounts on your first VAT return after registering.

What expenses are excluded from VAT reclaims?

Business entertainment is the most common exclusion, meaning you cannot reclaim VAT on meals, hospitality, or event costs provided to non-employees. Purchases used for private or non-business purposes are also blocked. If an expense is partly for business and partly personal, you may only claim the business proportion. Certain other items, such as cars not used exclusively for business, also have specific restrictions under HMRC rules.

How does Making Tax Digital affect my VAT reclaims?

Making Tax Digital for VAT requires all VAT-registered businesses to keep digital records and submit VAT returns using compatible software. This means you can no longer file returns manually through the HMRC portal. Your software must maintain a digital link from source records through to the submitted return. MTD does not change what you can reclaim, but it does change how you record, calculate, and file your claims.

How long should I keep records to support my VAT claims?

HMRC requires you to keep VAT records for at least six years. This includes all purchase invoices, receipts, VAT returns, and any calculations showing how you split costs between business and personal use. Digital copies are acceptable under MTD rules, but they must be legible and complete. Keeping well-organised records protects you during any HMRC compliance check and ensures you can justify every claim you have made.

What happens if I claim VAT incorrectly?

If you overclaim VAT, HMRC may issue an assessment requiring you to repay the excess amount, potentially with interest. Deliberate errors can lead to penalties ranging from 15% to 100% of the overclaimed tax. Careless mistakes typically attract lower penalties, especially if you disclose them voluntarily. You can correct minor errors on your next VAT return if they fall below the reporting threshold, but larger errors require separate disclosure to HMRC.

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