Box 4: VAT reclaimed on purchases and other inputs

What goes in box 4

The input tax you are entitled to deduct on business purchases in the period. HMRC says you cannot claim input VAT unless you have a proper VAT invoice to support the claim.

• VAT on business purchases and expenses, supported by valid VAT invoices
• Reverse charge VAT you declared in box 1 as the customer, subject to the normal rules
• Acquisition tax declared in box 2, where you are entitled to reclaim it

What to leave out

• VAT on goods bought wholly for your personal use
• VAT on business entertainment
• Amounts paid on assessments, or amounts HMRC already owes you
• Amounts HMRC has notified to you as over-declarations

If some of your sales are exempt

If you are partly exempt, the partial exemption rules limit how much input tax you can reclaim. HMRC covers this in its partial exemption guidance.

Common mistakes

• Reclaiming VAT without a valid VAT invoice to support the claim.
• Reclaiming VAT on business entertainment or on things bought for personal use.

Sources

• HMRC, How to fill in and submit your VAT Return (VAT Notice 700/12), section 3.5