Do I charge VAT on a quote?

If you're not VAT registered

You must not charge VAT or show a VAT amount on your quotes and invoices. Your price is simply your price.

You have to register once your VAT-taxable turnover goes over the registration threshold in any rolling 12-month period, or you expect it to in the next 30 days on its own. The threshold has been £90,000 since April 2024. Check GOV.UK for the current figure, as it can change.

You can also register voluntarily below the threshold. That can make sense if most of your customers are VAT-registered businesses that can reclaim it, but it usually makes you more expensive for homeowners.

If you are VAT registered

Add VAT at the correct rate to your price and show your VAT registration number on your quotes and invoices.

• Quotes for homeowners and other consumers must show the total price including VAT. Showing a price "plus VAT" to a consumer can be misleading.
• Quotes for businesses can show prices excluding VAT, as long as it's clear VAT will be added.
• Show the VAT amount separately so the customer can see how the total is made up.

Jobs that aren't charged at 20%

Most building and repair work on existing homes is standard-rated at 20%, but there are exceptions worth knowing:

• Installing certain energy-saving materials in homes, such as insulation, solar panels and heat pumps, is currently zero-rated across the UK until 31 March 2027. From 1 April 2027 it is due to go back to the reduced 5% rate.
• Building a new home is generally zero-rated.
• Some conversions, such as turning a building into homes or changing the number of homes in a building, can be charged at the reduced 5% rate.
• Some grant-funded heating and security work for people aged 60 or over, or receiving certain benefits, can be charged at 5%.

The rules for these reliefs are detailed, and HMRC publishes guidance on each. If a job might qualify, check the guidance before you quote, as getting it wrong can leave you paying the difference.

The domestic reverse charge

If you're VAT registered and working for another VAT-registered contractor under the Construction Industry Scheme (CIS), the domestic reverse charge usually applies. You don't charge them VAT; they account for it to HMRC instead. It never applies to work for homeowners or other end users. Our guide to the domestic reverse charge explains how it works.

"Including VAT" or "plus VAT"?

Disagreements about VAT often come from a quote that didn't make it clear. Always state which it is, and show the VAT amount and total. If you've been quoting a customer figures that include VAT, make sure your quote shows the same total, not that figure plus 20%.

How TradeKwote handles VAT

• Choose your VAT scheme once in Settings: not registered, standard 20%, or the domestic reverse charge.
• If you're not registered, no VAT is added or shown.
• If you type a figure that includes VAT, such as "£1,200 inc VAT", TradeKwote works out the net amount rather than adding VAT twice.
• Your VAT number appears on every quote and invoice, and on Pro the dashboard VAT summary shows what you've charged.