View Full Version : Reclaiming VAT or Tax in the UK

Nathan H
01-27-2008, 11:18 PM
Hi all,

Is there anyone in the UK currently registered for VAT (thats what we call sales tax in the UK) is so what things can we claim back?

this is more so aimed at the home office user like myself but i am sure the forum would appreciate any info

Thanks in advance....

02-24-2008, 05:57 PM
Basically you can reclaim VAT on anything you use for the Business. The downside is that you have to charge VAT on all your invoices. This OK for businesses who can in turn reclaim it but to home users or businesses that are not VAT registered have an extra 17.5% to pay.

You can claim for parts, business mileage, services (broadband, telephone etc) and office expenses.


02-24-2008, 07:23 PM
You're best off looking on here (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_InfoGuides&propertyType=document&id=HMCE_CL_001217) for details on what you can and can't claim back. I've just found out that if you VAT register, you can reclaim VAT on any purchases within the past 3 years provided you still own them, they were originally purchased for your company and you have the VAT receipt :eek:

I'm just looking into this option aswell Nathan and I've been trying to do a few examples for myself with and without VAT.

The example is for my company charging 45/hour for labour (lets say to remove a virus and setup a monitor) and to supply and install a 19" Hanns-G TFT - In both examples, the monitor will be purchased at 99.75 including VAT and delivery (genuine cost of this monitor). If my example is incorrect, please let me know :)

Without VAT example:

Purchase Monitor - 99.75
Sell monitor - 115
Labout Cost - 45
Profit - 45 + 115 - 99.75 = 60.25

With VAT example

Purchase Monitor - 84.89
VAT - 14.86
Total - 99.75

Labour Cost 45
VAT - 7.88
Total - 52.88

Sell Monitor - 97.87
VAT - 17.13
Total - 115

VAT on purchases (input)- 14.86
VAT on sales (output) - 25
VAT to pay - 10.15

Profit - 52.88 + 115 (income) - 84.89 (monitor price ex vat) - 10.15 (vat to pay) = 72.84

So the customer would pay 7.88 more and I would make 12.59 more. I'm going to try another example by readjusting my hourly rate to 40+vat.

02-24-2008, 11:26 PM
Some interesting examples there Simmy. :)

I'm not currently VAT registered, although I do intend to register. I am forming a Ltd. company which will be a "wrapper" for the repairs business, and also some other freelance work I do for a VAT registered business.

02-25-2008, 05:49 AM
You have to pay sales tax on your labor in the UK?

02-25-2008, 09:13 AM
Yes, we pay VAT (value added tax) on just about everything including things that are already heavily taxed (Car fuel).

Your labour is counted a service so taxable.