--- title: Who Can Reclaim VAT? UK Eligibility Guide 2026/27 description: "**Only a person or organisation registered for UK VAT can normally reclaim VAT, and only to the extent that the cost supports taxable business activities.** VAT registration by itself does not make every purchase recoverable. This 2026/27 guide explains who…" url: "https://www.accountingfirms.co.uk/knowledge-bank/who-can-reclaim-vat/" updated: "2026-08-12" category: Limited Company --- # Who Can Reclaim VAT? UK Eligibility Guide 2026/27 **Only a person or organisation registered for UK VAT can normally reclaim VAT, and only to the extent that the cost supports taxable business activities.** VAT registration by itself does not make every purchase recoverable. This 2026/27 guide explains who may reclaim VAT, which costs qualify, the evidence required and the main restrictions. ## Who is entitled to reclaim VAT? A VAT-registered taxable person can generally reclaim input tax on goods and services bought for taxable business purposes. The registered person might be: - a sole trader; - a partnership or limited liability partnership; - a limited company; - a charity or not-for-profit organisation carrying on taxable activities; - a VAT group; or - another entity registered or required to register for VAT. The purchase must be supplied to the registered person. A company cannot normally reclaim VAT on a director's private purchase merely because it later reimburses the director. ## What is input tax? Input tax is VAT charged on business purchases and expenses. It may include VAT on UK goods and services, imports, certain services received from overseas, overheads and research and development costs. The business deducts recoverable input tax from output tax charged on its sales. See our guide explaining the [difference between input and output VAT](https://www.accountingfirms.co.uk/knowledge-bank/what-is-the-difference-between-output-and-input-vat/). ## The business-purpose test The cost must have a direct and immediate link to the business's taxable activities. Where an expense has both business and private use, only a fair business proportion is normally recoverable. Examples include a mobile phone used privately, home-office utilities or a vehicle with mixed mileage. If a purchase relates to exempt supplies, recovery may be restricted by the partial-exemption rules. A partly exempt business must calculate the deductible amount using an approved or standard method and consider the de minimis rules. ## Which sales support VAT recovery? HMRC says input tax can normally be reclaimed where it relates to supplies charged at the standard, reduced or zero rate. Certain supplies made outside the UK can also carry a right to recovery where they would be taxable if made in the UK. Zero-rated sales remain taxable supplies. This means a business making zero-rated supplies can still be VAT registered and may recover related input tax, even though it charges customers VAT at 0%. ## Common costs that cannot normally be reclaimed - goods or services used privately or for non-business purposes; - most purchases of cars, subject to specific exceptions; - UK client and business-entertainment costs; - costs directly related to exempt supplies, unless partial-exemption provisions permit recovery; - VAT that a supplier charged incorrectly; - purchases under schemes where no separately recoverable VAT exists, such as many second-hand margin-scheme purchases; and - costs for which the business does not hold acceptable evidence. For hospitality, read [Can you claim VAT on client entertainment?](https://www.accountingfirms.co.uk/knowledge-bank/can-you-claim-vat-on-client-entertainment/) ## Can VAT be reclaimed before registration? Some pre-registration VAT can be recovered on the first VAT Return, provided the statutory conditions and evidence requirements are met. - **Goods:** HMRC generally allows qualifying goods obtained up to four years before registration if they are still held, or have been incorporated into goods still held, when registration begins. - **Services:** qualifying services received up to six months before registration may be recoverable if they relate to the registered business and its taxable activities. Costs already consumed, disposed of or attributable to non-taxable activity may not qualify. The business should prepare a schedule of the invoices and keep evidence supporting the claim. ## Evidence needed to reclaim VAT A valid VAT invoice is the normal evidence. It should identify the supplier, customer where required, invoice date and number, description, net amount, VAT rate and VAT charged. A bank or card statement proves payment but does not by itself show that a taxable supply with VAT occurred. Simplified invoices may be acceptable for lower-value purchases. Import VAT and postponed import VAT require the appropriate customs or accounting evidence. ## When is input tax claimed? Input tax is normally claimed on the VAT Return covering the supplier's tax point, provided the business holds the evidence. If evidence arrives later, the claim is generally made for the period in which it is received. Cash Accounting Scheme users must also satisfy the payment rules. Where input tax was omitted from the correct return, HMRC treats it as an error rather than allowing it simply to be inserted into any later period. VAT Notice 700 states that the correction or claim is subject to a four-year time limit. ## Can employees reclaim VAT personally? An employee does not reclaim business VAT from HMRC personally unless the employee is separately VAT registered for their own taxable business. The employer may be able to reclaim VAT on a qualifying employee expense where the supply and evidence meet HMRC's rules. ## Practical checklist - Confirm that the claimant is the VAT-registered person named on the return. - Identify the taxable business purpose. - Remove private, exempt and blocked expenditure. - Check that VAT was legally charged. - Retain a valid invoice or alternative evidence. - Apply any partial-exemption or capital-goods adjustment. - Claim in the correct VAT period. ## Frequently asked questions ### Can an unregistered business reclaim VAT? Not through a VAT Return. It may be able to recover qualifying pre-registration VAT after it becomes registered. ### Can a business reclaim all VAT after registering? No. Recovery depends on business use, the type of supply, evidence and special restrictions. ### Can VAT on zero-rated purchases be reclaimed? If a purchase is genuinely zero-rated, no VAT was charged and there is nothing to reclaim. A business making zero-rated sales can still recover VAT on qualifying costs. ## Official source See sections 10 and 11 of [HMRC VAT Notice 700](https://www.gov.uk/guidance/vat-guide-notice-700), updated 25 June 2026. Seek advice where a cost involves exempt supplies, mixed use, property, vehicles or an overseas transaction. ## Follow the reclaim process Once eligibility is established, our [VAT input-tax reclaim guide](https://www.accountingfirms.co.uk/knowledge-bank/what-is-reclaiming-vat/) explains invoices, return boxes and timing.