MOST VAT registered businesses are entitled to recover VAT on all business expenses. This also extends to out-of-pocket expenses employees might incur while performing their business duties.

This seems pretty straightforward, but there are a raft of exclusions, special rules and ways that businesses can make mistakes. Consequently, a large number of businesses take the low risk option and do not claim what they are entitled to which, over time, can amount to a considerable loss of money.

Understanding what can and cannot be claimed is the first step to solving this problem, but just as important is the evidence to support the claim.

Where possible a full VAT invoice should be obtained. Larger suppliers should be able to provide this as a matter of course. It is preferable to have your business name shown on the invoice as the purchaser, but not essential.

A less detailed invoice usually issued by retailers, restaurants and petrol stations is also acceptable.

For some coin-operated machines, an invoice is not needed, but generally the amount of VAT claimed will be small.

What is not acceptable, for any expenses claim, is a credit card statement or payment receipt.

If you have any questions about claiming back VAT, please contact Duncan Stocks on 0118 955 4185 or email duncan.stocks@bakertilly.co.uk.