How Far Back Can You Claim VAT When Registering?

Have you recently registered for VAT? If so, as you prepare to complete your first VAT return, you probably have a lot of questions. Can you reclaim VAT on expenses before registration? And if so, how far back can you claim VAT?

How Far Back Can You Claim VAT When Registering?

You can claim VAT expenses that you incurred before registering. For services, you can claim VAT expenses as far back as six months. For goods, you can claim VAT expenses as far back as four years. However, you can only claim for goods that you still have, or that you used to make other goods that you still have.

To make a VAT claim you need to provide invoices and receipts

You cannot claim VAT expenses on goods that you no longer have or use, even if you acquired them in the past four years. Plus, not all goods are eligible for VAT expense claims, nor are all services.

What Do You Need to Claim Back VAT?

To make a claim on any goods or services, you’ll need to provide invoices, receipts, a description of the goods or service, and details on how they relate to your business now. For example, if you want to reclaim the VAT expenses on a laptop that you bought three years ago, you simply have to explain that you still use this laptop for business purposes today.

And of course, now that you’re VAT registered, from now on you’ll have to keep these records for all the goods or services on which you want to reclaim expenses.

You can find a detailed guide to what you can and cannot reclaim on the government’s website. Find it here.

Am I Eligible to Register for VAT?

It’s compulsory to register for VAT when you expect your VAT taxable turnover to exceed £85,000 in the next 30-day period. You also need to register if your business had a VAT taxable turnover in excess of £85,000 in the last 12 months.

A taxable turnover of £85,000 or more is a significant sum for self-employed contractors and freelancers. So if you do meet the criteria, it’s a sign that things are going very well indeed for your business!

Read our complete guide to registering for VAT.

The Benefits of Registering for VAT

Once you meet this criteria, registering for VAT is mandatory. But you can voluntarily register for VAT any time you want, even if you’re just starting out as a self-employed freelancer or contractor.

Registering for VAT brings a lot of additional obligations and responsibilities when it comes to accounting, record-keeping, and submitting your tax return. Though there are many benefits to registering for VAT, beyond the VAT refunds for goods or services you buy for your business needs.

Registering for VAT can act as a strong trust signal. It demonstrates to clients that you’re serious, you’re a professional, and you mean business. This might be just the thing that encourages certain bigger clients to work with you. In this way, registering for VAT actively help your business to flourish.

Read more about the benefits of registering for VAT as a freelancer.

As Your Business Grows, The Risk Grows

If you’re self-employed, obviously you want your business to grow. But the more your business grows, the more uncertainty and risk you’ll have to deal with. And unfortunately, too many self-employed freelancers and contractors have seen their businesses sink when faced with an unexpected scenario. But with good insurance cover, and you can rest assured that you’ll be able to bounce back from any setback, no matter how big.

We offer insurance for contractors and freelancers from as little as 35p a day. There are no hidden fees, you can cancel at any time, and you can get an online quote and full cover in a matter of minutes. Head here for more information.