How to Reclaim VAT on Business Expenses

The short answer

If your business is VAT-registered, you can generally reclaim the VAT you pay on business purchases, offsetting it against the VAT you charge customers on your VAT return. The catch that trips people up is documentation: reclaiming VAT requires a valid VAT invoice, not just the card receipt most people keep.

What you can and cannot reclaim

You can reclaim VAT on goods and services bought for the business, from stock and equipment to many everyday costs. What you cannot reclaim varies by country but commonly includes business entertainment and certain vehicle expenses, plus anything for personal use. Purchases used partly for business and partly personally must be apportioned, so you reclaim only the business share.

Why the VAT invoice matters

A reclaim stands or falls on the paperwork. Tax authorities generally require a valid VAT invoice showing the supplier's VAT registration and the tax charged; a plain receipt or card slip often will not support the claim, though simplified invoices are accepted for smaller amounts in many places. This is the VAT equivalent of needing an itemized receipt: the detail is the proof.

Keeping VAT records straight

Collect and keep the VAT invoices behind every claim, since a return can be reviewed and unsupported reclaims disallowed. The practical challenge is the same as any receipt problem: the documents scatter across inboxes and pockets. Capturing them as you go, with the tax surfaced on each, is what makes VAT time calm instead of a scramble. Keep them as long as your jurisdiction requires, along the lines of how long to keep receipts.

The faster way: collect every VAT invoice automatically

Hunting for valid VAT invoices at return time is the slow way, and a missing invoice means a reclaim you cannot make. Mylo takes that whole job off your plate before it becomes one. Working quietly in the background, it captures receipts from your inbox and the stores you shop at, matches each to the card charge that paid for it, and files it as a categorized expense, ready to review or sync to QuickBooks. No new card and no manual entry: it works on top of the Visa, Mastercard, or Amex you already use. Free for individuals on iOS, Android, and the web; teams are $9/user/mo (30-day free trial).

Sources: general VAT guidance; rules vary by country (for example UK HMRC and EU VAT rules). This article is general information, not tax advice. Rules change and situations differ, so check with a qualified tax professional for your situation.