Value Added Tax (VAT) plays a crucial part in how most goods and services are sold in the UK. Still, as with most tax matters, it can get complicated - especially when it comes to making VAT claims.

In today’s article, we'll explore VAT claims for non-VAT registered individuals and sole traders, from who is eligible to how to register for VAT.

Understanding VAT

Let’s start with the basics:

What is VAT?

VAT (Value Added Tax) is a consumption tax added to most products and services sold by VAT-registered businesses. 

It's ultimately paid by the end consumer, but businesses are responsible for collecting and paying VAT to HMRC.

Who has to register for VAT?

All businesses in the UK - including sole traders - must register for VAT with HMRC if their taxable turnover exceeds the VAT registration threshold. The threshold for the 2026/27 tax year is £90,000, and is expected to remain at this level for the foreseeable future.

However, you can also choose to voluntarily register even if your turnover is less than £90,000.

Once registered, businesses charge VAT on their sales, which is known as output tax. They can also claim back VAT on their business purchases, which is called input tax.

Wondering if your digital services business needs to register? Be sure to check out our ultimate guide which makes VAT for digital services clear and easy.

Can I claim VAT back even if I’m not VAT registered?

As a general rule, the answer is no. You must be registered for VAT to reclaim the VAT you pay on goods and services for your business. 

However, while non-VAT registered individuals cannot reclaim VAT on most business expenses, there are a few exceptions where it might be possible. 

1. Reclaiming VAT from before you were registered

This is the most common and significant exception. While you can’t make a claim when you’re unregistered, you can reclaim VAT on certain purchases made before your registration date. This is known as reclaiming pre-registration VAT. 

Once you are VAT registered, you can reclaim:

• VAT on goods bought up to four years before registration, as long as you still own them and they’re used in your business.
• VAT on services you bought for your business up to six months before you registered, provided they’re related to the business. 

The rules allow VAT to be reclaimed on capital assets purchased up to four years before registration, as long as they are still owned and used in the business when you register. This makes registering for VAT a powerful tool for recovering costs you’ve already incurred. 

2. Specific VAT refund schemes

HMRC operates a few specific refund schemes that allow certain individuals and non-business entities to reclaim VAT without being VAT registered. 

DIY housebuilders scheme

If you’re building your own home or converting a non-residential property into a home, you can use this scheme to reclaim the VAT on building materials. Claims must be submitted within a strict time limit.

Charities, museums, and galleries

Certain charities can reclaim VAT on costs related to their non-business activities. This includes palliative care, search and rescue, air ambulance, and medical courier charities. A similar scheme exists for museums and galleries that offer free entry to the public.

Local authorities and academy schools

These organisations can use a specific HMRC service to claim VAT refunds on purchases made for their non-business activities. 

Can I claim VAT back as a sole trader? 

Yes, you can make a claim for VAT on all the goods and services you purchased for your business as soon as your business is VAT registered.

Registering for VAT as a sole trader

If you don’t meet the criteria above (i.e. you’re not a local authority, academy school or a charity) and you aren’t VAT registered, you won’t be eligible to claim back VAT.

However, if your annual turnover exceeds £90,000, you’re eligible to register for VAT with HMRC, which will enable you to claim back VAT in future. 

You can read our step-by-step guide to registering for VAT to find out how to get started.

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When to seek help from a tax professional

If you need help understanding your eligibility to make a VAT claim, registering for VAT as a sole trader, or if you’re looking for any type of VAT guidance or other tax-related advice, our service for sole traders, Sole Trader Pro, might be for you. 

Sole Trader Pro combines award-winning self-employed accounting software with support from in-house accredited accountants to help you make smarter finance decisions and never worry about tax again.

Final thoughts

In short, most individuals, sole traders and businesses will need to register for VAT before making any VAT claims. 

If you were hoping to make a VAT claim this year as a non-VAT registered sole trader or business, we know this news might come as a disappointment. But don’t worry! It’s never too late to get yourself registered for VAT in future, as long as you’re eligible and ideally meet the VAT registration threshold we outlined earlier. 

Consult a professional tax advisor today to find out how to register for VAT, and what kinds of things you’ll be able to claim input tax back for to support your thriving business. Good luck!