What expenses can you claim vat on?
If you wish to claim vat on any expense it is required that you have a valid vat receipt or invoice. The invoice should be in the name of your business and should have the vat number of the business that you buy from and a breakdown of the net, vat and gross totals of the amount that you have paid.
The exception to this is if the purchase is for a small amount, less than £25, for items such as car parking and toll charges.
Meals, Travel and Accommodation
Food
Most food is zero rated for vat the exceptions would be food that is cooked and prepared for you to eat. So, if you go out for meal the food will have vat charged on it. Generally, sweets and confectionary, Crisps, soft drinks and Ice-cream will have vat charged.
Food that will not have vat include unprocessed food, fruit and vegetable that are uncooked, cold sandwiches, salads and hot drinks such as tea and coffee.
Travel
There will generally be no vat charged on train, bus and flight tickets. So, you will not be able to claim vat on these journeys. Taxi fares will charge vat if the driver is liable to register for vat, you will be issued a vat receipt if you are charged vat.
Accommodation
Costs to stay in hotels can be claimed as a vatable expense.
Cars and Mileage
If you lease a car you can claim 50% of the vat back on the leasing charges, other expenses such as repairs and maintenance are not covered by the 50% restriction and the full amount of the vat can be reclaimed.
The easiest way to claim the vat back on fuel and mileage is to use HMRC’s approved fuel rates. These can be found here.
The vat will be claimed using the fraction 20/120 on the amount claimed per mile using the fuel rate.
Business Expenses
If you buy anything for your business this may also have vat on. These expenses may include:
Accountancy expenses
Office Equipment
Mobile Phone
Computer Software
Expenses that you do not claim vat on
Bank Charges
Insurance
Books, magazines and newspapers.
Payments of Wages, Salary and Dividends
Payments of Corporation Tax
Payments of Self Assessment Tax
Payments of Vat