Industry News - 21st October 2026
Are you reclaiming all the VAT your business is entitled to?
If your business is VAT registered, you can usually reclaim VAT on many of the goods and services you purchase for business purposes.
However, it’s easy to overlook certain expenses or miss opportunities to reclaim VAT, which could mean your business is paying more than it needs to.
Understanding what you can claim, and when, could help improve your cash flow and help you make the most of the VAT rules.
Which business expenses can you claim VAT back on? 🧾
You can usually claim back VAT on things you buy for your business, as long as they are for your taxable business activities and you have the right VAT invoices.
Some common examples are:
- Office supplies and equipment
- Computers, software, and subscriptions
- Professional services like accountancy fees
- Travel and accommodation for business
- Some vehicle running costs
But not every expense qualifies, and some items have special rules.
What about expenses used for both business and personal purposes? 🏠
If you use something for both business and personal reasons, you can normally only reclaim the VAT relating to its business use.
Mobile phone 📱 – If you use your phone equally for business and personal calls, you could reclaim 50% of the VAT on your phone and monthly plan, provided the costs qualify.
Working from home 🏡 – If your home office takes up 20% of your property’s floor space, you may be able to reclaim 20% of the VAT on eligible household utility bills.
The key is to keep accurate records showing how you calculated the business proportion of your claim.
Can you reclaim VAT on purchases made before registration? 📅
You might be surprised to learn that you can sometimes reclaim VAT on purchases made before your business became VAT registered.
Generally, this includes:
- Goods: Purchased up to four years before VAT registration, provided they are still held or otherwise meet the relevant conditions.
- Services: Received within the six months before VAT registration.
These purchases must meet HMRC’s qualifying conditions and relate to your taxable business activities.
Review your records from before registration, particularly if you invested in equipment, stock, or professional services.
Are there special rules for vehicles and travel? 🚗
VAT on vehicles, fuel and travel expenses can be more complicated.
You may be able to reclaim VAT on certain business travel and vehicle running costs, but restrictions apply, particularly where cars are available for private use.
Business entertainment expenses are also generally excluded from VAT recovery, although some exceptions apply.
It’s important to check the rules before including these expenses on your VAT return.
What if you’re using the VAT Flat Rate Scheme? 📊
If your business uses the VAT Flat Rate Scheme, the rules are slightly different.
Under this scheme, you generally cannot reclaim VAT on your purchases because the flat rate percentage already takes these costs into account.
However, you may be able to reclaim VAT on certain qualifying capital assets where the purchase costs £2,000 or more, including VAT, subject to HMRC’s conditions.
Perrigo Perspective💡
At Perrigo Consultants, we believe managing VAT shouldn’t just be about meeting HMRC deadlines. It’s also about making sure your business isn’t paying more than it needs to.
Eligible expenses are easy to miss, especially when you’re busy running a business. Checking your VAT claims regularly could mean you get back money you’re entitled to and improve your cash flow.
Our advice is: don’t just submit your VAT return on time. Use the opportunity to review what you’re claiming, keep your books in order, and make sure you’re not missing out on potential VAT savings.
Often, the little things make the biggest difference to your business finances.
Could you be missing out on VAT repayments? 🔍
VAT can be complicated, and it’s not always obvious which expenses qualify.
Regularly review your business purchases, check your invoices, and understand the rules to help you identify VAT you’ve overlooked.
Even small amounts add up over time.
At Perrigo Consultants, we’re here to help you understand your VAT obligations, find ways to recover VAT, and make sure your returns are accurate.
If you’re unsure whether your business is reclaiming all the VAT it’s entitled to, contact the Perrigo Consultants team on 01299 488860 or book a FREE discovery call below.
Internet link: You can also check the latest guidance on Flat Rate Scheme for small businesses and Charge, reclaim and record VAT on the GOV.UK website
