As a Redruth bookkeeping practice we find that lots of our clients regularly ask what they can claim the VAT back on, this isn't area specific as we have clients all around Cornwall but a common question.
So what are the rules on reclaiming VAT?
You can claim VAT back on goods and services which are for business use, to claim back the VAT you must have a valid VAT receipt - if you do not have a receipt you will not be able to reclaim the VAT back. This is why modern cloud based technology is great as you can get a copy of your receipt/invoice on your accounting software, meaning it is there if you ever face a VAT inspection.
What makes up a valid VAT receipt?
It will show:
Date
Description of purchase
Cost before VAT
VAT amount
Total amount
Name, address and VAT number of the supplier
You are allowed to put through simplified receipts for supplies under £250, a simplified invoice/receipt doesn't have to show the date, customer name, amount of VAT, price per item, quantity but it must show the total amount including VAT, have a unique invoice ref and show who your purchased from name, address and VAT number. For a more detailed look at this you can find info here.
What can't I claim VAT back on?
Items such as salaries, insurance, bank interest and business entertainment (again there are some quirks on the rules), if the item is for something personal or if the supply is exempt from VAT.
What are the common mistakes people make?
Quite often a business will not be VAT registered but will add VAT when putting invoices onto their accounting system. This can affect the figures and isn't good practice.
I would like support with my VAT returns
If you would like to make sure your VAT returns are submitted, correctly and on time but either don't have the time or worry it won't be done correctly, please get in touch on 01209 702920, email us at info@tidalbookkeeping.co.uk or use our contact form here.
We offer our bookkeeping services to clients in and around; Redruth, Camborne, Pool, Truro, Falmouth and most of other areas in and around Cornwall. Cloud based tech means we can look after your books remotely.