If you are VAT-registered, you can reclaim the VAT you pay on goods and services used in your business — but many tradespeople either do not claim everything they are entitled to, or are unaware that certain purchases qualify at all. Unclaimed input VAT is money left on the table. This guide covers the categories that most often get missed, along with the rules that determine what you can and cannot reclaim.
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Find a tradesperson — freeThe basics: how VAT reclaims work
When you are VAT-registered, you charge VAT on your sales (output tax) and pay VAT on your purchases (input tax). Each quarter, you pay HMRC the difference between what you collected and what you paid. If your input tax exceeds your output tax in a given quarter, HMRC refunds the difference.
To reclaim VAT on a purchase, you must: be VAT-registered; have a valid VAT invoice from the supplier showing their VAT number and the VAT amount; and have purchased the goods or services for use in your VAT-registered business. You cannot reclaim VAT on personal purchases, and you cannot reclaim VAT from suppliers who are not VAT-registered (their invoices carry no VAT).
You need a VAT invoice — not just a receipt
A till receipt from B&Q or a delivery note from a supplier is not a VAT invoice. A valid VAT invoice must show the supplier's name and VAT registration number, the date, a description of the goods or services, and the VAT amount separately stated. Always ask for a proper VAT invoice — many trade suppliers issue them automatically, but smaller suppliers sometimes need reminding.
Your van or work vehicle
The VAT rules on vehicles are more generous for vans than for cars. If you purchase a van (defined by HMRC as a commercial vehicle primarily constructed for carrying goods) solely for business use, you can reclaim 100% of the VAT on the purchase price. The same applies to repairs, servicing, MOTs, and insurance — though most insurance policies are VAT-exempt, meaning no VAT to reclaim.
Fuel is slightly more complex. If your van is used only for business journeys, reclaim 100% of the VAT on fuel. If it is also used privately — even driving home from jobs — you either need to keep a detailed mileage log to apportion business and private use, or you can apply the flat-rate HMRC fuel scale charge (a fixed quarterly addition to your VAT bill that covers the private element). Many tradespeople find the mileage log more accurate and cheaper.
Cars are different from vans
HMRC classes a car as a vehicle that is not primarily for carrying goods. If you use a car for work, you can only reclaim 50% of the VAT on running costs — and 0% on the purchase price unless the car is used exclusively for business with no private use whatsoever. In practice, HMRC almost never accepts that a car has zero private use. Stick to a van for full reclaim.
Tools, equipment, and plant
Tools and equipment bought for use in your trade are fully reclaimable. This includes hand tools, power tools, scaffolding, ladders, testing equipment, generators, compressors, and any other equipment used to carry out construction work. The full VAT is reclaimable as long as you have a valid VAT invoice and the tools are for business use. Even tools that have a long working life — rather than being consumables — qualify.
Mobile phone and data plan
If you have a dedicated business mobile phone used only for work, you can reclaim 100% of the VAT on the handset and the monthly contract. If you use one phone for both personal and business calls — which most sole traders do — you can reclaim the business proportion of the VAT. Determining the exact proportion requires some record-keeping, but HMRC generally accepts a reasonable estimate based on usage. Keeping two separate phones (one personal, one business) simplifies this considerably.
Workwear, PPE, and safety equipment
VAT on protective clothing and personal protective equipment (PPE) is reclaimable: hard hats, hi-vis vests, steel-capped boots, gloves, ear defenders, safety glasses, and similar items all qualify. Branded workwear — overalls, polo shirts, or jackets with your company logo — is also reclaimable as a business expense, because clothing displaying a company logo is not considered regular clothing under HMRC rules.
What you cannot reclaim is VAT on ordinary clothing that you happen to wear for work. Jeans, trainers, and an unbranded fleece that you also wear at weekends do not qualify, even if you wear them on site every day.
Business software and subscriptions
Software used in your business is fully VAT-reclaimable. This includes job management apps, quoting and invoicing software, accounting software, cloud storage, and any subscription service used for business purposes. As long as the supplier is VAT-registered and provides a valid VAT invoice (usually sent automatically by email), you can reclaim the VAT on every payment.
Training and professional development
Training courses directly related to your trade are reclaimable. An electrician attending an 18th Edition update course, a gas engineer renewing their ACS assessment, or a builder completing a CSCS card refresher — all of these are legitimate business expenses on which you can reclaim the VAT, provided the training supplier is VAT-registered and issues a proper invoice.
The training must be relevant to your business. A course in photography or cooking would not qualify, even if you argue it helps you with marketing or client hospitality.
Professional memberships and accreditations
Annual membership fees for trade bodies and industry accreditations often carry VAT — and that VAT is reclaimable. Examples include NICEIC and NAPIT membership for electricians, Gas Safe registration, Checkatrade and Trustatrader subscription fees, CHAS safety accreditation, Constructionline membership, and similar. Always check the invoice — some membership bodies are charities or structured in a way that means no VAT is charged, but many do charge it.
Accountancy, bookkeeping, and professional fees
Fees paid to an accountant, bookkeeper, or tax adviser for work relating to your business are fully VAT-reclaimable. This includes the preparation of self-assessment returns, VAT return preparation, payroll administration, and general business advice. If your accountant is VAT-registered (most are), their invoices will carry VAT at 20% — all of which you can reclaim.
Subcontractor invoices
If you pay a VAT-registered subcontractor, you can reclaim the VAT on their invoice — provided they have given you a valid VAT invoice. Many self-employed tradespeople are not VAT-registered (particularly those below the £90,000 threshold), meaning their invoices carry no VAT. But where a subcontractor does charge VAT, the input tax is fully reclaimable.
Materials bought for jobs
Every time you buy materials for a job — timber, fixings, pipe, cable, plasterboard, paint, tiles — you pay VAT at the point of purchase. If you are using those materials in your construction business, you reclaim the input VAT on your next VAT return. This is one of the highest-volume VAT reclaim categories for most tradespeople and worth tracking meticulously. Every builder's merchant invoice, every trade counter purchase, every online order from a trade supplier — all carry recoverable VAT.
Hotel and accommodation for work
If you stay overnight away from home for a genuine business reason — a job site too far to travel to daily, an early-morning start, a multi-day project — the VAT on hotel accommodation is reclaimable. The key test is whether the journey is genuinely for business purposes. Meals while staying away overnight also carry VAT that is broadly reclaimable, though entertaining clients does not.
What you cannot reclaim
- VAT on cars (if there is any private use — which HMRC almost always assumes)
- Client entertainment — taking customers for a meal or to a sporting event
- Personal clothing with no business branding
- Purchases from non-VAT-registered suppliers (no VAT on their invoices)
- Purchases made before you registered for VAT (with limited exceptions for stock and assets on hand at registration)
- Business insurance — usually exempt from VAT, so there is nothing to reclaim
- Wages and salaries — these are not VATable
Keeping the records HMRC requires
You must keep VAT records for at least six years. HMRC can inspect them and disallow any reclaim where you cannot produce the original VAT invoice. Digital record-keeping — scanning or photographing invoices, using accounting software, or using a dedicated expense tracking app — makes this considerably easier than storing physical paper. Under Making Tax Digital (MTD) for VAT, all VAT-registered businesses are now required to keep digital records and file VAT returns digitally.
Photograph receipts immediately
Thermal printer receipts — the type you get at trade counters — fade rapidly and can become illegible within months. Photograph or scan every receipt the same day you receive it. A digital copy is acceptable to HMRC and is far more reliable than hoping paper survives six years in a drawer.
Input VAT reclaims are one of the most straightforward ways a VAT-registered business reduces its tax cost — but only if records are kept properly and every eligible purchase is captured. The businesses that miss out are almost always doing so through poor record-keeping rather than ineligibility.
— ICAEW Tax Faculty
Worth registering voluntarily?
You must register for VAT once your taxable turnover exceeds £90,000 in a rolling 12-month period. But you can register voluntarily below this threshold — and for tradespeople who buy significant volumes of materials or equipment, voluntary registration can be financially beneficial. You would start reclaiming VAT on all your purchases while charging VAT on your sales. Whether this benefits or costs you depends on your customer mix: if most of your customers are businesses (who can themselves reclaim VAT), the addition of VAT to your prices may be neutral. If you work mainly for domestic homeowners (who cannot reclaim), adding 20% to your prices may make you less competitive. It is worth discussing with an accountant.