Should I register for VAT as a UK tradesperson (and should the customer buy the materials)?
VAT is a tax on most of what you sell. If you are registered, you add it to the job. You keep records. You send HMRC the difference between the VAT you charged and the VAT you paid on things you bought for the business.
This is for every trade. Plumber, builder, roofer, decorator, heating engineer, electrician, carpenter. Same rules.
HMRC sets the rules. Register on GOV.UK.
When you must register
GOV.UK says you must register if either:
- your total taxable turnover for the last 12 months goes over £90,000
- you expect your taxable turnover to go over £90,000 in the next 30 days
Taxable turnover is the total of everything you sell that is not VAT-exempt. Labour counts. Materials you supply count. Zero-rated work still counts toward the threshold.
If you already went over in the last 12 months, you must register within 30 days of the end of that month.
If you can see a contract that will push you over in the next 30 days, you must register by the end of that 30-day stretch. The date HMRC uses is the day you realised, not the day the money lands.
If you register late, you still owe VAT from the date you should have registered. You might also get a penalty.
You do not have to register if you only sell VAT-exempt or out-of-scope work. Most trade jobs are not that.
Check the live figures on VAT thresholds. They can change.
The 20% jump
Once you are registered, you must charge VAT on the goods and services you sell, unless they are exempt.
The standard rate is 20%. That is most work.
GOV.UK for builders puts it simply: VAT for most work on houses and flats by builders and similar trades like plumbers, plasterers and carpenters is 20%. There are exceptions. They are listed later. Do not guess. Check the job.
What that does to a quote
Take the price without VAT. Multiply by 1.2. That is the price including 20% VAT.
A homeowner cannot reclaim that VAT. They are not a VAT-registered business. The 20% is extra money they pay.
A VAT-registered business customer is different. HMRC says the VAT you charge them is their input tax, if the work is for their business. They reclaim it on their VAT return. The 20% is not a cost to them in the same way. You still have to show it.
So the same registered quote looks dearer to a private house than to a VAT-registered firm.
Put VAT as its own line. Put your VAT number on the invoice. GOV.UK requires both.
If you are not registered, do not charge VAT. Do not invent a VAT number.
Voluntary registration
You can choose to register if your turnover is under £90,000. GOV.UK calls this voluntary registration.
VAT Notice 700/1 says you can also apply before you start making taxable supplies. You must be in business. A hobby does not count. You can choose the date you become registered.
Once HMRC register you, you charge VAT from that date. You send a VAT return every tax period even if there is nothing to pay or reclaim.
Why a trader might
You can reclaim VAT on things you buy for the business: materials, tools, van costs that count. You need a valid VAT invoice. If the job is for a VAT-registered business, they can reclaim the VAT you charge. You get the input VAT back. They get the output VAT back. The 20% is not stuck in the middle.
Why a trader might not
Most of your customers are homeowners. They cannot reclaim. Your quote goes up by 20%, or you swallow it and keep less. You take on returns, records, and the 20% on every taxable job from the day you are registered.
That is the trade-off GOV.UK describes. Not “you will win more work”. Work does not follow a VAT number.
Should the customer buy the materials?
A lot of homeowners think: “If I buy the boiler / the tiles / the cable myself, I skip 20%.”
That is the trap. Here is what the official pages actually say, and what they do not.
What is true
Your labour still has VAT on it if you are registered. You sell a service. You must charge VAT on the services you sell unless they are exempt. Them buying the copper does not turn your labour into a VAT-free job.
Materials they buy are their purchase. VAT Notice 708 says retailers and builders merchants charge VAT at the standard rate on most items they sell. A homeowner pays that at the counter. They cannot reclaim it.
If you supply and fit the materials, they follow the rate of the work. Same notice: builders charge VAT on building materials they supply and incorporate at the same rate as their work. If the work is zero-rated or reduced-rated, so are those building materials (some items never count as building materials and stay at 20%).
HMRC’s construction manual is blunt about the condition. For the goods to get the 0% or 5% rate, they must be supplied with the qualifying services, and you must incorporate them. Goods on their own, from a merchant, do not get that rate.
That matters on the jobs that are not 20%. Example from GOV.UK’s rates list: energy-saving materials supply-only are standard-rated. The same list currently puts qualifying installed energy-saving materials at 0% until 31 March 2027. Buying the insulation yourself at the merchant and then paying you to fit it is not the same supply as you supplying and installing it.
You cannot reclaim VAT on materials you did not buy. GOV.UK lets you reclaim VAT on items you buy for the business, with a valid VAT invoice. If they bought the kit, the invoice is not yours. There is nothing for you to reclaim.
What is a practical risk, not a VAT statute
GOV.UK does not write a special “customer bought the materials” VAT offence. Do not pretend it does.
The practical problems are still real:
- Wrong spec. They bought the cheap boiler, the wrong pipe size, the tiles that will not sit on that floor. You did not spec it. Fitting it can mean extra labour, a row, or a job you should refuse.
- Warranty on the goods. The merchant sold the goods. If the part is dud, that is usually their receipt, not yours. Your quote should say you are pricing labour on materials they supply, and you are not standing behind the goods.
- Delays. The order is late or incomplete. You are on site with nothing to fit.
Say this on the quote, in writing, before anyone spends money.
A VAT-registered business customer buying materials themselves is a different conversation. They may reclaim the merchant VAT. That does not change your labour VAT, and it is not the homeowner trap.
Do not mix this up with the VAT domestic reverse charge. That is VAT-registered business to VAT-registered business on construction services under CIS. It is not a homeowner at B&Q.
Some work is not 20%
GOV.UK lists exceptions. Conditions apply. Read the page, then VAT Notice 708, before you zero or reduce a rate.
Zero rate can apply to things like building a new house or flat, and some work for disabled people in their home.
Reduced rate (5%) can apply to things like converting a building into a house or flats, renovating a house or flat that has been empty long enough, and some other listed work.
Rates change. Check current VAT rates. If you are not sure, ask HMRC or an accountant. Wrong rate on a quote is your problem, not the customer’s theory.
Put VAT on the quote, as its own line
If you are registered, show the net, the VAT, and the total. GOV.UK wants the VAT as its own figure, and your VAT number on the invoice. If you are not registered, write that you are not VAT-registered. Do not charge VAT.
Once you have the rate, the next job still has to go out with VAT as its own line. Your assistant prices it from your own rates and sends the quote that way.
A job quote is a way to put VAT as its own line before they say yes. An invoice is the same when you bill.
What tends to break it is time. You know the rule. You still send a lump sum from the van. That is why the assistant exists.
