VAT Calculator for Tradespeople — Add or Remove VAT Instantly

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Common VAT Scenarios for Tradespeople

Quick reference for which VAT rate applies to common types of trade work in the UK.

Type of Work	VAT Rate	Notes
New-build residential property	0%	Zero-rated for qualifying new dwellings
Renovation of property empty 2+ years	5%	Reduced rate for long-empty dwellings
Converting non-residential to residential	5%	E.g. barn conversion, office to flat
Energy-saving materials (residential)	0%	Insulation, solar panels, heat pumps
Standard home renovation	20%	Kitchen/bathroom refit, extensions, loft conversions
Repairs and maintenance	20%	Plumbing repairs, electrical work, roofing repairs
Commercial fit-out / refurbishment	20%	Shops, offices, restaurants
Landscaping and driveways	20%	Patios, fencing, driveways, garden walls

VAT Guide for UK Tradespeople

Understanding VAT is essential for any tradesperson working in the UK. Whether you are a builder, plumber, electrician or roofer, getting VAT right on your quotes and invoices is crucial for staying compliant and maintaining healthy cash flow.

The VAT Registration Threshold

As of 2024/25, the VAT registration threshold is £90,000 in taxable turnover over any rolling 12-month period. Once you exceed this threshold, you must register for VAT within 30 days. Many tradespeople voluntarily register below this threshold to reclaim VAT on materials and business expenses.

Choosing a VAT Scheme

HMRC offers several VAT schemes that can benefit tradespeople:

Flat Rate Scheme -- pay a fixed percentage of gross turnover (e.g. 9.5% for general building) instead of tracking input/output VAT separately. Simpler but you cannot reclaim VAT on most purchases.
Standard VAT Accounting -- charge 20% VAT on invoices and reclaim VAT on purchases. Better if you have high material costs.
Cash Accounting -- only pay VAT when customers pay you, rather than when you invoice. Helps cash flow.

Getting VAT Right on Quotes

When quoting for work, always be clear about whether your price includes or excludes VAT. For domestic customers, quoting inclusive of VAT is common as they cannot reclaim it. For commercial clients, quoting ex-VAT is standard. Always show the VAT breakdown on your invoices. Tools like QuoteSmith handle VAT calculations automatically in your proposals, so you never get it wrong.

Frequently Asked Questions

Common questions about VAT for UK tradespeople.

When do tradespeople need to register for VAT?

You must register for VAT when your taxable turnover exceeds £90,000 in any 12-month rolling period (as of 2024/25). You can also register voluntarily below this threshold. Once registered, you must charge VAT on all your work and submit quarterly VAT returns to HMRC.

What VAT rate applies to building and renovation work?

The standard VAT rate of 20% applies to most building and renovation work. However, new-build residential properties are zero-rated (0%), renovation of dwellings empty for over 2 years qualifies for 5%, and conversions of non-residential to residential also attract 5%. Energy-saving materials may qualify for 0% or 5%.

Can tradespeople reclaim VAT on materials and tools?

Yes, if you are VAT-registered you can reclaim the VAT you pay on business purchases including materials, tools, equipment, van costs, fuel, and other business expenses. This is done through your quarterly VAT return. You must keep valid VAT invoices for all claims.

Do I charge VAT on labour only or materials too?

If you are VAT-registered, you must charge VAT on the full amount you invoice -- both labour and materials. The VAT rate depends on the type of work, not whether it is labour or materials. You cannot split a job to charge different rates on labour versus materials.

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