VAT on quotes: what UK tradespeople need to know

Charge VAT on a quote only if you're VAT registered. If you are, show the price before VAT, the VAT and the total, and put your VAT number on the quote. If you're not registered, you can't charge VAT at all, so the price you quote is simply the price.

Do I need to charge VAT on my quotes?

Only if you're registered for VAT. You have to register when your VAT taxable turnover goes over £90,000 in any rolling 12-month period, or when you expect it to go over that in the next 30 days alone. It's turnover, not profit, and it's any 12 months, not the tax year. That's the threshold at the time of writing: check GOV.UK's guidance on when to register for the current figure.

You can also register voluntarily below the threshold. Some trades do because it lets them reclaim the VAT on tools and materials. The catch is that your prices to homeowners go up by the VAT, and a homeowner can't claim it back.

What if I'm not VAT registered?

Then you must not charge VAT, and your quote shouldn't mention it. Don't write "plus VAT" and don't add a VAT line. The total on your quote is what the customer pays.

The VAT you pay on materials at the merchant is just part of your costs. Build it into your prices like any other cost. You don't show it separately and you can't reclaim it.

How should I show VAT on a quote?

Three figures, in this order:

• Subtotal: the price of the work before VAT.
• VAT: the amount, with the rate next to it, for example "VAT (20%)".
• Total: what the customer pays.

Add your VAT registration number to the quote too. A quote isn't a VAT invoice, so the strict invoice rules don't apply to it, but the number shows the customer the VAT is real and saves a question later. When the job is done you'll still need to give a proper VAT invoice: GOV.UK explains what an invoice must include.

If the customer is a homeowner, make sure the figure they see first is the one they'll pay. Consumer law expects the total price to be given inclusive of taxes, and "£2,000" that turns into £2,400 at the end is the quickest way to lose trust.

What rate of VAT applies to my work?

Most trade work on existing homes is standard rated at 20%. There are exceptions, and they're worth knowing because they change the price the customer pays:

• Zero rate: building a new home, and installing certain energy-saving materials such as insulation, solar panels and heat pumps in residential property. The zero rate on energy-saving materials runs until 31 March 2027. See VAT Notice 708/6.
• Reduced rate of 5%: some residential work, including renovating a home that has stood empty for two years or more and certain conversions. See VAT Notice 708.
• Standard rate of 20%: nearly everything else, including repairs, maintenance, decorating, extensions and refits.

The conditions for the lower rates are detailed and HMRC expects you to get them right. If you think a job qualifies, read the notice or ask your accountant before you quote. GOV.UK has an overview of VAT for builders.

What is the domestic reverse charge, and does it affect my quotes?

It affects you when you work for another construction business, not when you work for a homeowner. Under the domestic reverse charge, if you and your customer are both VAT registered, the work falls under the Construction Industry Scheme, and your customer is going to sell the work on, you don't charge them VAT. They account for it to HMRC instead.

So a quote to a main contractor for subcontract work would normally show no VAT, with a note that the reverse charge applies. A quote to Mrs Patel for her bathroom carries VAT in the normal way, because she's the end user.

How does QuoteMate handle VAT?

Switch VAT on in your business details and set your rate, which starts at 20%. From then on every quote shows the subtotal, the VAT and the total, and your VAT number appears on the quote, the PDF and the email. If you're not registered, leave it off and VAT never appears.

QuoteMate applies one rate to the whole quote. It doesn't set a different rate on each line, so a single job that mixes standard and reduced rate work is one to plan with your accountant. More on VAT and itemised pricing in QuoteMate.

This guide is general information for UK tradespeople, not legal or tax advice. Rules and thresholds change, so check the linked official pages, or ask an accountant or solicitor about your own situation.