Overview
Registering for VAT as a sole trader allows you to reclaim VAT on certain business expenses incurred before your VAT registration date. This guide explains how Ember helps you identify and reclaim eligible pre-registration expenses on your first VAT return.
What expenses are eligible?
You cannot reclaim all pre-registration expenses. Check HMRC’s VAT Guide (Section 11) for details on what qualifies.
Ember attempts to make this process easier for you by only showing you potentially eligible transactions based on the following rules:
Goods (Assets and Stock)
4-year rule: You can reclaim VAT on goods purchased up to 4 years before VAT registration. The business must still own the goods at the time of registration.
Eligible categories in Ember:
Stock (up to 4 years)
Asset Purchase (up to 4 years)
VAT On Imports (up to 4 years)
Services
6-month rule: You can only reclaim VAT on services received within 6 months before VAT registration.
Eligible categories in Ember:
Travel (6 months)
Food And Drink (6 months)
Marketing and PR (6 months)
Legal And Professional (6 months)
Other Costs (6 months)
Rent And Rates (6 months)
Software (6 months)
Consultancy (6 months)
Insurance (6 months)
Office Costs (6 months)
Training (6 months)
Phone Internet (6 months)
Vehicle Costs (6 months)
Equipment Hire (6 months)
Accountancy Fees (6 months)
How to reclaim pre-registration expenses in Ember
Step 1: Review automatically identified transactions
Ember automatically identifies potentially eligible transactions based on:
The category assigned to the transaction.
Whether they fall within the eligible time period (4 years for goods, 6 months for services)
Whether they have VAT applied
If a transaction has the No VAT rate applied to it, it will still show in your list, but you will have to update its rate to a rate that would result in a reclaim, such as the Standard rate, to make it eligible to get VAT reclaimed.
These transactions will appear on the Pre-registration tab of your first-ever VAT return. You will only see a Pre-registration tab on your first-ever VAT return, which Ember identifies through your VAT connection to HMRC.
If you don’t have any pre-registration expenses to review, you must confirm they aren’t missing before filing becomes available.
Step 2: Include or exclude transactions
Necessary: Before submitting your VAT return, you must explicitly decide whether to include or exclude each potentially eligible transaction.
Review each transaction in the list.
Select the checkboxes next to transactions you want to include
You can exclude all transactions by selecting Exclude all in the pop-out modal before selecting any transactions.
You can select multiple transactions to include by selecting multiple check boxes.
If you have included or excluded a transaction by mistake, you can correct it by selecting it again and using the pop-out modal.
Click the Include/Exclude button in the pop-out modal.
When selecting a transaction that is neither included nor excluded or was previously excluded, you will see an option in the pop-out modal to include it on your return.
When selecting a previously included transaction, the pop-out modal will allow you to exclude it from your return.
Step 3: Add any missing transactions
If you have pre-registration expenses that aren’t showing up automatically:
Use Manual Entries to add missing pre-registration expenses.
Ensure you:
Set the correct date (must be within the eligible period)
Apply the appropriate VAT rate.
Use an eligible category from the list above.
Important considerations
Business use only: Expenses must be for business purposes only
Valid VAT receipts: You must have valid VAT invoices or receipts for all reclaimed expenses
Still in use: Goods must still be owned and used in the business.
Common questions
Why can’t I submit my VAT return?
Submission is disabled until you’ve explicitly decided to either:
Include or exclude some transactions, OR
Confirm there are no pre-registration expenses.
What if I’m unsure about a transaction?
When in doubt, exclude the transaction or consult with your accountant. HMRC may request evidence of any reclaimed VAT pre-registration.
Can I change my mind later?
Once your first VAT return is submitted, you cannot update a transaction in Ember to reclaim pre-registration expenses on later returns. Make sure you’ve included all eligible expenses before submitting.
Need more help?
Review HMRC’s detailed guidance.
Contact your accountant for specific advice.
Check Ember's support centre for additional VAT guidance.