How Bedford Business Owners Can Reclaim VAT on Everyday Purchases

If you are reading this article it is likely you are either new to VAT or you are unsure whether you are reclaiming everything you are entitled to. I speak to Bedford business owners all the time who say the same thing. They thought VAT was only reclaimable on the big stuff or they assumed their bookkeeping software did it automatically. Sadly that is not the case. VAT reclaims are only as accurate as the records you keep and the codes you apply.

The good news is that VAT reclaims are one of the easiest ways to reduce your tax bill as long as you follow the rules. Below I explain exactly how reclaiming VAT works and what to consider before you start claiming everything in sight.

What VAT Can Be Reclaimed?

If you are VAT registered you can reclaim VAT on purchases that are wholly and exclusively for business use. This includes a huge amount of everyday expenses such as:

• Tools and equipment
• Stationery and office supplies
• Fuel and mileage (with conditions)
• Software and subscriptions
• Workwear and protective clothing
• Telephone and broadband costs
• Business insurance
• Materials and stock
• Repairs and maintenance
• Utilities for business premises
• Advertising and marketing

The aim is simple. If the cost supports your business you can usually reclaim VAT.

However reclaiming VAT correctly requires understanding a few rules that many Bedford business owners overlook.

How VAT Reclaims Work in Practice

To reclaim VAT you must:

• Be VAT registered
• Keep proper VAT invoices or receipts
• Log the purchases correctly in your software
• Use the right VAT codes
• Submit your VAT returns on time
• Avoid mixing personal and business spending

Every VAT registered business must keep digital records under Making Tax Digital. This is why we always encourage clients to use accounting software such as Xero. It keeps everything organised and protects you if HMRC ever asks for evidence.

Everyday Purchases You Might Not Realise Include Reclaimable VAT

Many clients are surprised when we show them how many everyday items include VAT. Here are a few examples that business owners often miss.

Office supplies

Everything from pens to printer ink to envelopes usually includes VAT at 20 percent. Small purchases add up quickly so logging them properly makes a real difference.

Software and subscriptions

Most digital tools include VAT. Xero, QuickBooks, Microsoft, Adobe, Shopify, job management apps and many more. If you are not reclaiming VAT on these you are losing money every month.

Work clothing

You cannot reclaim VAT on everyday clothing but you can reclaim it on protective clothing, uniforms or anything required for safety such as steel toe boots or high visibility jackets.

Fuel

Fuel reclaims depend on whether you use the mileage method or the actual cost method. This is where many people claim incorrectly. Mileage already includes the VAT element. If you claim fuel receipts as well you have overclaimed which HMRC will challenge.

Advertising

Google Ads, Facebook Ads, local sponsorships and most marketing platforms often include VAT. Businesses forget this because the invoices are digital and easy to ignore.

Mobile phones

If the phone is used for business you can reclaim VAT on the monthly bill. If it is a personal device you must apportion the business percentage correctly.

Important VAT Rules That Bedford Businesses Must Follow

There are a few rules you must take seriously if you want to reclaim VAT without issues.

1. You must have a VAT invoice

HMRC will not accept a bank statement as evidence. You need an invoice that clearly shows VAT. We see this mistake constantly with Amazon and fuel receipts.

2. You cannot reclaim VAT on entertainment

Taking clients for meals or drinks is classed as business entertainment and is blocked for VAT.

3. Repairs vs improvements

Repairs are reclaimable. Improvements may not be depending on the context. The distinction matters especially for landlords and trades.

4. You must code purchases correctly

Using the wrong VAT code can lead to over or under claiming. We fix this all the time when new clients join us.

5. No mixing personal spending

If your Amazon account is half personal and half business your VAT reclaim becomes messy and often incorrect.

How Much VAT Are You Missing Out On?

To give you an idea of how quickly VAT adds up:

• £500 per month of software = £100 VAT reclaimed
• £400 per month on materials = £80 VAT reclaimed
• £200 on fuel and vehicle costs = £40 VAT reclaimed
• £300 on stock or consumables = £60 VAT reclaimed

Over a year this is more than £3,000 in reclaimable VAT for many Bedford businesses. Some businesses reclaim more than £10,000 simply because they track everything correctly.

The sad truth is that every year we meet clients who were missing thousands because nobody had ever explained the rules clearly.

How Accountants Help You Get VAT Reclaims Right

When we help clients reclaim VAT properly we follow a clear process that protects you and maximises your reclaims:

• We review your receipts and invoices
• We clean up your VAT codes
• We explain the rules in simple terms
• We identify where you have underclaimed
• We correct any overclaims before HMRC spots them
• We ensure your software is set up properly
• We strengthen your record keeping
• We submit VAT returns on time and accurately
• We support you during any HMRC checks

The result is a clearer VAT position and a far smaller VAT bill.

Common Mistakes We See in Bedford Every Week

We deal with VAT mistakes constantly. The ones we see the most include:

• Reclaiming VAT on mileage when they should not
• Forgetting to reclaim VAT on subscriptions
• Claiming VAT on meals and entertainment
• Mixing personal and business Amazon purchases
• Having no VAT invoice at all
• Using the wrong VAT scheme
• Claiming VAT on vehicles used personally
• Overclaiming VAT on fuel

These mistakes can lead to penalties, repayments and in some cases full VAT enquiries.

What if You Are Not VAT Registered Yet?

If your turnover is below the threshold you cannot reclaim VAT. However you should still keep good records because:

• You may register voluntarily
• You may hit the threshold unexpectedly
• You may benefit from reclaiming VAT on certain capital purchases once registered

We guide clients on the best time to register so they do not lose out.

How Towerstone Helps Bedford Businesses with Everyday VAT

At Towerstone we work hand in hand with our clients to ensure every reclaimable cost is captured correctly. We do not offer weekend or in person evening appointments but we do speak with clients in the early evening when needed because VAT issues often arise when you are busy during the day.

We monitor your VAT returns, fix incorrect coding, help with supplier invoices and make sure you never miss out on money you are entitled to reclaim.

Clients always tell us the same thing. Once the VAT is handled properly their cash flow improves immediately.

The Bottom Line for Bedford Business Owners

Yes you can reclaim VAT on everyday purchases and yes most Bedford businesses underclaim without realising. VAT is one of the easiest areas to save money as long as your records are tidy, your invoices are correct and your accountant helps you stay on top of the rules.

If you want to reclaim VAT confidently and avoid mistakes that trigger HMRC enquiries Towerstone can support you every step of the way.