Not VAT Registered – Can You Still Claim a VAT Refund?

Not VAT Registered - Can You Still Claim a VAT Refund?

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VAT is a tax normally associated to the business environment and certainly, under the usual VAT rules, to be able to claim back VAT on purchases the tax payer has to be:

  1. VAT registered
  2. Be able to link the VAT paid on their costs to Taxable Business Income that they generate
  3. Hold the correct VAT evidence to support the claim

But there are situations where certain types of organisations CAN recover the VAT they have paid on their costs even though they are not VAT registered AND those costs do not support ANY type of business activity – Taxable or Exempt.

This VAT Refund system, using a form VAT126, is specific to the following bodies who are not VAT registered:

  • a local authority or similar body
  • an academy school or multi-academy trust (MAT)
  • a charity in palliative care, air ambulance, medical or search and rescue
  • a non-departmental body or similar body not registered for VAT

The VAT these unregistered entities can recover must relate to their non-business activities – statutory activities in the public bodies or free to access services and support in the charities noted.

If you’re in such an organisation and have never yet made a claim to recover this VAT then there is potentially time available to you as the process for claiming, using the online form VAT 126, can go back over a four year period. If it’s a first claim you will have to print the form off and post it to HMRC but subsequent claims can be done online, once your organisation is set up in their system.

To find out more about the online form, how to complete and submit it, then follow this link to the HMRC guidance.

Speak to an expert

If you would like specific VAT support on this or any VAT-related matter then contact us using the form below.

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