Are you unsure of what you can reclaim VAT on? Here we’ve explained what you can and cannot reclaim any VAT on:

As a business, you can usually claim back any VAT you have paid on goods and services bought for business use, for which you have a valid VAT receipt. Remember, no receipt, no reclaim!

If the item you buy is also for personal use, you can only claim back a proportion of the VAT paid, only the actual business element of this item, mobile phone bills are a good example. You might use your mobile 60% for work and 40% for personal, in which case you can only claim back the VAT on the 60% of the purchase price and plan. You need to ensure that you have adequate records to support your VAT reclaim which shows how you calculated the business use percentage.

It’s usually a good idea to have separate phone bills for personal and business use, this way it’s easier when claiming back any VAT.

A Valid VAT Receipt

A valid VAT receipt includes the following:

  • Name, Address and VAT number of the supplier
  • Your name and address
  • The date
  • A description of the goods or services
  • The cost before VAT
  • The separate VAT amount
  • The total amount that contains the VAT.

Having said that, many VAT receipts are actually a shorter version, simply containing the total amount paid, the seller’s name and VAT number. To work out any VAT quickly this website is very helpful – http://www.vatcalculator.co.uk/ . This is the amount you can reclaim.

Can you claim the VAT back on items brought in the EU?

Do you buy goods from the EU?

You can’t claim for goods bought in EU countries, although you may be able to reclaim VAT paid via the electronic cross-border refund system. You can reclaim VAT on products and services bought during the refund period, plus VAT on goods imported to Britain during the same timescale.

You can’t claim for VAT that has been invoiced incorrectly, where VAT has been levied on sending goods to another member state or exported items outside the EU.

Things you cannot reclaim VAT for

You can’t reclaim VAT on insurance, salaries, PAYE, postage, bank interest or business entertainment. However, VAT on entertainment for overseas customers can on occasions be reclaimed when that entertainment is very basic.

You can’t claim for anything you’ve bought specifically for personal use, or the products and services your business uses from VAT-exempt supplies. Also items you buy under VAT second-hand margin schemes and business assets transferred to you as a going concern are also exempt from VAT reclaim.

Not registered for VAT?

When your business isn’t registered for VAT, you don’t have to charge VAT to your customers, however, you also can’t claim any VAT back. That’s why so many smaller businesses try to stay under the VAT radar, under the registration limit (the current threshold is £83,000 – see https://www.gov.uk/vat-registration/when-to-register for further details) . Charging VAT to a customer who isn’t registered for VAT means they’ll have to cover this cost as well.

What about VAT post-Brexit?

Domestic VAT rules remain the same following the end of the Brexit transition period, however, VAT rules relating to imports and exports have changed.

Prior to Brexit and during the transition period, the UK was part of a regime called the EU VAT Regime, which meant that a UK business didn’t have to register for VAT in each EU country. Now though, as of 1st January 2021 Great Britain now has to treat EU countries like they do countries outside of the EU.

It can get very confusing so we’d suggest taking a look at this article by Sage explaining this in a bit more detail.

Do you need support with the VAT system?

If you need VAT support, we’re here to help, find your nearest Rosemary Bookkeeper today.

Don’t miss these important deadlines the 2021/22 tax season, ensure you’ve got all of your bookkeeping organised for the year.

MAY 2021

1st – Due date for payment of Corporation Tax for period ended 31st July 2020

3rd – Deadline for submitting P46 for employees whose car/fuel benefits changed during the quarter to 5th April 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st March 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with February, May, August or November Year Ends

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st May 2020 as year end


JUNE 2021

1st – Due date for payment of Corporation Tax for period ended 31st August 2020

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th April 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with March, June, September or December Year Ends

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

30th – Corporation Tax Returns filed by companies with 30th June 2020 as year end


JULY 2021

1st – Due date for payment of Corporation Tax for period ended 30th September 2020

5th – Deadline for reaching PAYE Settlement Agreement for 2020/21

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st May 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Second Payment on Account 2020/21 due

31st – Corporation Tax Returns filed by companies with 31st July 2020 as year-end


AUGUST 2021

1st – Due date for payment of Corporation Tax for period ended 31st October 2020

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th June 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st August 2020 as year end


SEPTEMBER 2021

1st – Due date for payment of Corporation Tax for period ended 30th November 2020

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st July 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with year end 31st March 2022

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

30th – Corporation Tax Returns filed by companies with 30th September 2020 as year end


OCTOBER 2021

1st – Due date for payment of Corporation Tax for period ended 31st December 2020

5th – Deadline for Self Assessment registration to notify HMRC of Income/Capital Gains Tax for 2020/2021

7th – Deadline for VAT returns and payments of Accounting Quarter period ending 31st August 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st October 2020 as year-end

31st – Deadline for postal submission of Self Assessment Tax Returns for tax year ended 5th April 2021 to be received by HMRC


NOVEMBER 2021

1st – Due date for payment of Corporation Tax for period ended 31st January 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th September 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

30th – Corporation Tax Returns filed by companies with 30th November 2020 as year-end


DECEMBER 2021

1st – Due date for payment of Corporation Tax for period ended 28th February 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st October 2021

14th – Due date for Corporation Tax quarterly instalment for large companies with year-end 31st March 2022

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Due date to file Corporation Tax for companies with 31st December 2020 year-end


JANUARY 2022

1st – Due date for payment of Corporation Tax for period ended 31st March 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 30th November 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Deadline for filing Self Assessment Tax Returns for tax year ended 5th April 2021 and 2020/2021 Capital Gains Tax

31st – Balancing payment of tax due for 2019-2020 and first Payment on Account for Income Tax for 2021/2022

31st – Due date to file Corporation Tax for companies with 31st January 2021 year-end


FEBRUARY 2022

1st – Due date for payment of Corporation Tax for period ended 30th April 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st December 2021

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

28th – Due date to file Corporation Tax for companies with 28th February 2021 year-end


MARCH 2022

1st – Due date for payment of Corporation Tax for period ended 31st May 2021

7th – Deadline for VAT Returns and payments of Accounting Quarter period ending 31st January 2022

14th – Due date for Corporation Tax quarterly instalment for large companies with year-end 31st March 2022 and 31st December 2022

19th – Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC

22nd – Monthly deadline for electronic remittance of CIS, NICs and PAYE to HMRC

31st – Corporation Tax Returns filed by companies with 31st March 2021 as year-end


APRIL 2022

1st – Due date for payment of Corporation Tax for period ended 30th June 2021

5th – 2021/2022 Tax Year Ends

6th – 2022/2023 Tax Year Begins

6th – IR35 in the private sector comes into force

30th – Corporation Tax Returns filed by companies with 30th April 2021 as year-end

 

We can help with your bookkeeping needs, find your nearest Rosemary Bookkeeper here for more information on our services.

The UK exited the EU VAT regime, Customs Union and Single Market from 1 January 2021. This means the loss of a range of compliance simplifications and the imposition of customs declarations, goods regulations, services and import VAT.

In this article HERE you can find an outline of the major changes affecting VAT treatment after the UK leaving the EU.

Here you can find the most recent guidance from the government; Import goods into the UK: step by step

If you import goods into Great Britain from outside the UK or from outside the EU to Northern Ireland you may have to pay import VAT on goods. For supplies of services from outside the UK you must account for VAT under the reverse charge procedure.

Guidance on Paying VAT on imports from outside the UK to Great Britain and from outside the EU to Northern Ireland

Export goods from the UK: step by step
Guidance on how and when you can apply zero-rated VAT to exported goods – Goods exported from the UK from 1 January 2021

TOMS – Tour Operators Margin Scheme 

If you supply digital services to private consumers you can read the guidance here – VAT rules for supplies of digital services to consumers 

CIS VAT changes

If you’re in the construction sector changes on VAT are coming on 1st March 2021.

VAT reverse charge technical guide HERE.

VAT is due when a VAT invoice is issued, or payment is received, whichever is earlier.

For invoices issued for specified supplies that become liable to the reverse charge, the VAT treatment for invoices with a tax point:

  • before 1 March 2021 – the normal VAT rules will apply and you should charge VAT at the appropriate rate on your supplies
  • on or after 1 March 2021 – the domestic reverse charge will apply
MTD advisor

At Rosemary Bookkeeping Newbury & Basingstoke, we are pleased to say we are Quickbooks Making Tax Digital Certified.

If you need to get ready for Making Tax Digital and don’t know where to start, what it means, or if it applies to you?

Get in touch today and we can arrange a free bookkeeping health check and see how we can help with Making Tax Digital.

MTD advisor

about making tax digital

about making tax digital

Making Tax Digital will change the way your business pays its taxes to HMRC. It is a scheme by the UK government to make it easier for businesses and individuals to manage their taxes. The first stage comes into play on 1st April 2019 and is called Making Tax Digital for VAT.

From that date, VAT-registered businesses (those companies with their turnover over the VAT threshold, which is currently £85,000) will be required to digitally submit their tax records to HMRC. They will no longer be able to do this via HMRC’s Government Gateway website.

What does that mean for businesses?

If you are VAT registered, then you will need to move to digital record keeping (i.e. use software to record all your VAT invoices and receipts). If you are not VAT registered, then digital record keeping is optional for the time being.

If you are VAT registered and do not yet use software to record your VAT information (invoices to customers and from suppliers) you need to start planning for Making Tax Digital. The implementation date is 1st April 2019.

My company uses spreadsheets for business records – what will that mean for me?

You can still continue to use spreadsheets to digitally record and store your business records. However, you will need to make sure those spreadsheets can digitally submit any necessary data to HMRC.

My business is not VAT registered and I don’t know if I will earn £85,000 this year. What should I do?

You will only be required to follow the rules of Making Tax Digital if your turnover exceeds £85,000 – the VAT threshold. You will need to keep track of your turnover over the last 12 months on a cumulative basis, and if at any point your total turnover exceeds £85,000 you will need to register for VAT.

What if I temporarily go over the VAT threshold?

If your business isn’t VAT registered and you do go over the threshold, you will need to comply with the requirements of Making Tax Digital. If your taxable turnover then drops below the threshold, you still need to continue complying with the legislation.

My business is under the VAT threshold, but I want to be part of Making Tax Digital. Is that possible?

Yes. Your business can choose to waive exemption if you wish to voluntarily follow the requirements of Making Tax Digital.

It’s important to note that “Making Tax Digital” is only coming in to play for VAT registered businesses in April 2019. For all other businesses, it comes into force in April 2020.

With this in mind, it’s a great idea to get started on digital bookkeeping so you are ready for the change. Starting early will help you to understand the workload involved and you will have plenty of time to decide if outsourcing to a well prepared Bookkeeper would be the best option for you.

Outsourcing is actually a very realistic option for business owners so don’t be scared. If you’re still not sure, Rosemary Bookkeeping are more than happy to come and help you find out about making tax digital or just do a 1-2-1 health check with you and give you the opportunity to decide for yourself if you think you could benefit with no obligation, contact your local Rosemary Bookkeeper today.