You may believe you can reclaim VAT for any purchase you put through your business account, but you can’t. You cannot reclaim VAT on a purchase which is not for your business. However, if you purchase an item for both business and personal use, the amount of VAT which can be reclaimed depends on which purpose is the main one.

HMRC accepts that even a small amount of business use can entitle a business to reclaim VAT. If the purchase is of consumable goods or services, such as stock or broadband, you can reclaim VAT corresponding to the proportion of business use.

However, if the goods are equipment where there could be varying amount of business and private use there are two ways to account for the VAT.

  1. You can reclaim some VAT if you have a reasonable idea of the proportion of business and private use. If this turns out to be different from your estimate you cannot amend your claim.
  2. You could reclaim all the VAT as long as you expect there to be some business use and only pay some VAT when you use the equipment privately.

 

If you are unsure about the use of some of your equipment such as cars, vans, or IT equipment, call Vincent & Co on 01803 500500 and we will help.