Reclaiming VAT

Who can reclaim Value-Added Tax (VAT)?

If you are making taxable supplies of goods and services or qualifying activities, you can reclaim VAT. To reclaim VAT you must make a claim through your VAT 3 return.

You are not entitled to reclaim VAT used for making exempt supplies or for your non-business activities.

If the costs relate to both taxable and other activities, you can reclaim the VAT used for your taxable supplies.

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, including qualifying vehicles.

You must have a valid VAT invoice or relevant Customs receipt to support your claim. You must keep records to support your claim.

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 or drink, accommodation or other entertainment services, where it forms all or part of the cost of providing an advertising service
  • entertainment
  • passenger motor vehicles, excluding qualifying vehicles
  • petrol, otherwise than as stock-in-trade
  • contract work involving the handing over of goods when such goods are themselves not deductible.

Next: Persons engaged in taxable, exempt and non-business activities