5 Common VAT Return Mistakes

5 most common VAT mistakes

Value Added Tax should be one of the easiest taxes to understand, you pay the tax man the difference between what you have paid in VAT, and what you have received in VAT from your customers. Nevertheless VAT return mistakes do happen, So here are our top 5 VAT mistakes and gotchas to be aware of.


No Receipt? No VAT claim!

We have spoken about keeping records for HMRC with our regular tax returns, but for VAT it is even more important to keep all those receipts.

You need to make sure the item(s) you purchased are all at the same VAT rate also. Those leaflets you got printed up, they are probably at 0% VAT, but the gas heaters you bought in the cold snap last year, they are 5% VAT.



If you operate a business where you entertain clients, and would normally include it in your tax return, be careful with the VAT. It is not normally possible to claim back VAT on entertainment for clients. It may be allowable on entertainment for staff and management however.


Part business expenses

If you have expenses where only part is for business use, for example your home phone line, you need to split the VAT and claim for the VAT which is for business use only.


Entering VAT twice

If you are producing pro-forma invoices in addition to actual invoices, be careful you are not duplicating!


Claiming VAT on transport and fuel

This is similar to #3, you can only claim VAT back on fuel where the fuel has been used for business and not personal transportation. The vehicle purchase VAT can only be claimed back providing the vehicle is to be used solely for business.

VAT Return Mistakes

I hope you found this guide useful, however it cannot take the place of professional advice given from your accountant, and we do not take responsibility for any errors in this document, and do be aware, things may have changed since this document was written. If you have any questions or need help with your tax return, please contact us.

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