I’m not VAT registered; can I claim VAT back?

You can only claim for VAT on goods and services purchased for your business if you are VAT registered.

However, there are some exceptions.

If you’re not VAT registered, here’s how you might be able to claim VAT back.

What is VAT and who must register for it?

Value Added Tax (VAT) is an indirect, consumption tax that is added to most products and goods sold by VAT-registered businesses.

Your business is responsible for recording, collecting and paying VAT to HMRC if you are VAT registered.

All businesses in the UK, including sole traders, must register for VAT with HMRC if their turnover exceeds £85,000.

It is important to remember that you can still register for VAT if your turnover is less than £85,000.

Once you are registered, you can charge VAT on your sales – this is known as output tax.

You can also claim VAT back on your business purchases which is called input tax.

However, you should be aware that the Chancellor, Jeremy Hunt, announced a new VAT threshold in his latest Spring Budget.

From 1 April 2024, all businesses with a turnover of less than £90,000 will no longer have to register for VAT and could de-register themselves if they turn over less than £88,000.

When can I claim VAT back?

Whilst non-VAT registered businesses cannot claim VAT for most of their business expenses, you might be able to claim VAT back on certain expenses via HMRC’s website.

This applies if you are an organisation such as:

A local authority
An academy school
A charity

This includes aspects like:

VAT paid on capital assets
Exports outside of the EU
Expenses related to charitable activities

If you don’t meet the above criteria, and are not VAT registered, you won’t be eligible to claim back VAT.

How can I claim VAT as a non-VAT registered business?

If your business is eligible to reclaim VAT, you will need:

A unique reference number from HMRC
Your registered organisation postcode
The start/end dates for the VAT claim

You will also need to provide relevant bank statements and invoice details – these will need to be submitted within four years of the supply.

It is important you understand if you are eligible to make a VAT claim as this will help you to obtain relief that might help to boost your business.

If you would like to discuss claiming for VAT as a non-VAT registered business, or to discuss how to register for VAT, contact us today.