Submitting Your First VAT Return? Here’s What You Need to Know

If you’ve recently registered for VAT and are preparing your first return, it’s normal to feel uncertain—especially when it comes to reclaiming VAT on things you paid for before registering. Here’s some straightforward advice to help you get it right and avoid delays with HMRC.

1. Expect HMRC to Check Your First Return

Most first-time VAT returns show that you’re owed money from HMRC. That’s because:

You’ve probably spent more than you’ve earned (e.g. on stock, equipment, or setup costs).
You may not have started selling yet but have been preparing for it.
You can claim VAT on some purchases made before your registration date.

But be aware: HMRC often checks these first repayment claims carefully. They want to be sure your business is genuine and not set up just to reclaim VAT fraudulently.

Tip:

To avoid delays, be ready to show things like:

Your business plan
Premises rental agreements
Contracts, supplier invoices, or job offers
Adverts or evidence that you’re actively trading or preparing to trade

2. Claiming VAT on Pre-Registration Expenses

Here’s how to know what you can (and can’t) claim on your first VAT return.

Goods (e.g. stock, equipment, vans)

Must have been bought within 4 years before your registration date
Must still be owned by the business when you register
Must have been used for business purposes

Example: If you bought a van 3 years ago for your business and still have it when you register for VAT, you can claim the VAT you paid on that van.

Services (e.g. website design, consultants, repairs)

Must have been bought within 6 months before you registered
Can’t have been used up or linked to work you did before registering

Example: You can’t claim VAT on a job done 8 months ago, or on services linked to a sale you made before you became VAT-registered.

Common Pitfall: Services That Feel Like Goods

Some work, like building renovations, might seem like goods (bricks, glass, etc.) but are classed as services by HMRC. That means you can only claim VAT if they happened within 6 months before you registered.

3. Intending to Trade? You Can Still Register

Even if you haven’t started selling yet, you can register for VAT as an “intending trader”—as long as you genuinely plan to sell taxable goods or services later.

This lets you:

Start claiming VAT now
Improve cash flow while you prepare to launch

Good to know: HMRC won’t make you repay the VAT if you later change your mind or your plans fall through—as long as you always had a real intention to trade.

4. Should You Register Voluntarily or Wait?

Sometimes it’s better to register before you’re required to by law—especially if you’ve made large purchases and want to claim VAT back sooner.

But other times, waiting until you cross the £90,000 sales threshold makes sense—particularly if your customers can’t reclaim VAT, like private individuals.

Example:

Two self-employed builders buy vans costing £40,000 + VAT. One registers immediately and reclaims the £8,000 VAT. The other waits 3 years until required to register. If he still owns the van then, he can still claim the VAT—but only on his first return.

5. Flat Rate Scheme? You Can Still Claim

If you’re using the Flat Rate Scheme, you can still claim VAT on pre-registration expenses in the same way—so don’t worry, this one-off claim is still available.

6. Get It Right or Risk an Error

If you mistakenly claim VAT on a non-eligible expense (like old services), HMRC could issue an assessment and demand repayment.

Key things to check:

Are the expenses within the right time limits?
Are you sure whether something is classed as a good or a service?
Was the service used before you registered? If yes, you may not be able to claim.

Final Thought

Your first VAT return is a great opportunity to recover VAT you’ve paid during setup. But getting it wrong could trigger delays or penalties. If you’re unsure about what you can claim, or how to present your return, ask for help early.

Need Help Submitting Your First VAT Return?

At Merranti Accounting, we help business owners get their VAT setup right from day one—whether you’ve already registered or are still deciding if now’s the time.

We’ll:

Review your pre-registration costs
Help you maximise your VAT claim
Deal with any HMRC queries on your behalf

Get in touch today to speak to one of our VAT specialists.