Who can reclaim Value-Added Tax (VAT)?
If you are making taxable supplies of goods and services or are engaged in qualifying activities, you can reclaim VAT. To reclaim VAT you must make a claim through your VAT 3 return.
You may not reclaim VAT on goods or services used for making exempt supplies or for your non-business activities.
Certain costs may relate to both taxable and non-taxable activities. You can reclaim the portion of the VAT that relates to your taxable supplies.
The time limit for claiming a repayment of VAT is four years.
If you are not registered for VAT, different rules apply.
What VAT can you reclaim?
You may reclaim the VAT charged on goods and services used for the purposes of your taxable supplies.
You need to keep records to support your claim, including a valid VAT invoice or relevant Customs receipt.
What VAT can you not reclaim?
You cannot reclaim VAT on the following costs even if you are registered for VAT and make only taxable supplies:
- food, drink or other personal services for yourself, your agents or employees. The exception being to the extent that they are part of a taxable supply of services
- accommodation, other than qualifying accommodation in connection with attendance at a qualifying conference
- food, drink, accommodation or other entertainment services, where it forms all or part of the cost of providing advertising services
- passenger motor vehicles, excluding qualifying vehicles or vehicles used as stock in trade
- petrol, unless used as stock-in-trade
- contract work involving the handing over of goods when such goods are themselves not deductible
- Goods purchased by an accountable person that are subject to a margin scheme
- Expenditure incurred on the acquisition or development of immovable property forming part of the assets of a business, where the goods are to be used for a non-business purpose.
Next: Persons engaged in taxable, exempt and non-business activities