Reclaiming VAT Through your Contractor Limited Company

As a contractor working through your own limited company you can reclaim VAT on any goods and services you have bought. however there are HMRC rules that you must follow. It's important that you double check these points:

1. The purchase must be wholly for business reasons
2. It is an expense in an HMRC allowable category
3. You have on file a valid and correctly constructed VAT invoice

HMRC say a VAT invoice has to include the following details:

• The name, address and VAT registration number of the supplier
• The supplier's unique invoice number
• The name and address of your limited company business
• Date and also when the goods were supplied
• A description of the goods/services that were bought, like
  
  • The unit price
  • The amount payable excluding VAT
  • How much VAT is levied

Not all the documentation you may get from the company is classified as a proper VAT invoice, and therefor not allowed by HMRC. These documents are not valid for the purpose of reclaing VAT:

• A statement
• A delivery note
• A request for payment
• A pro-forma invoice

If you are in doubt, or have any questions, about what VAT your contractor limited company can reclaim the make sure you ask your contractor limited company accountant.