If you're running a creative business - whether that's a design studio, a production company, or a content creation outfit -chances are you've made a fair few purchases to get things up and running. Maybe you've only recently become VAT registered. Or perhaps you've just uncovered a dusty folder of old receipts and are wondering if you can still reclaim the VAT. Here's what you need to know.
Reclaiming VAT on Purchases Made Before You Were VAT Registered
Yes, it is possible to reclaim VAT on goods and services purchased before your business became VAT registered, but there are rules and time limits.
Goods (stock, equipment, materials)
You can reclaim VAT on goods bought up to 4 years before your VAT registration date if all the following apply:
- The goods were bought by the business that is now VAT registered.
- They were bought specifically for business use.
- They're still used by the business on the date of VAT registration (e.g. you haven’t sold them or used them up).
💡 Example: If you bought a DSLR camera 3 years ago and still use it in your video production business, you may be able to reclaim the VAT when you register.
Services (design work, software subscriptions, consultancy)
For services, the window is shorter. You can reclaim VAT on services supplied up to 6 months before your registration date, again provided they were for business purposes.
💡 Example: If a web designer helped you launch your portfolio site 5 months before you registered for VAT, and you have a valid VAT invoice, you can usually reclaim it.
Reclaiming VAT You Forgot About (or Found the Receipt Later)
Even the most organised creatives can miss things, especially when you're juggling client work, shoots, pitches and admin.
The good news? HMRC doesn’t penalise you for forgetting to reclaim VAT in an earlier return. You can include it in your next VAT return as long as:
- The VAT amount is less than £10,000, or
- If between £10,000 and £50,000, it must be under 1% of your turnover for the return period.
Anything bigger than that? You’ll need to write to HMRC with the details and ask them to make the adjustment.
What Counts as a "Missed" VAT Claim?
- You received a VAT invoice late.
- You didn’t realise an expense was reclaimable.
- You forgot to include it in your VAT return.
💡 Tip: Make sure you keep proper VAT invoices. Bank statements, card receipts or screenshots from Etsy won’t cut it - HMRC requires a valid VAT invoice showing the supplier’s VAT number.
How to Reclaim Late VAT
If the purchase was before VAT registration:
You make the claim when submitting your first VAT return and there's usually a specific section in your accounting software to do this.
If you missed it after registration:
Include it in the purchase section of your next VAT return, making sure it’s clearly documented. The right software can often make these adjustments automatically.
Don’t Push It Too Far
Reclaiming VAT incorrectly can backfire. Don’t try to claim VAT on:
- Items bought personally (not through your business)
- Receipts that don’t show VAT (not all do!)
- Invoices older than 4 years (goods) or 6 months (services) from your VAT registration date
If you’re unsure, ask your accountant or bookkeeper before including it in your return.
Final Thoughts
VAT can feel like a maze, especially when juggling creative deadlines and client work. But reclaiming what you're entitled to could mean hundreds - or even thousands - of pounds back in your business. Whether you’re newly VAT registered or just doing a tidy-up of old paperwork, don’t leave money on the table.
If you’re a creative business owner and want to make sure you're not missing out on VAT reliefs or overpaying tax, we’d love to help. Drop us a message, and let’s get you sorted.
Need help?
Why not book a meeting with us to discuss your circumstances and see how we can help.
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