Who we help
VAT rates for builders and contractors
If the rate on your invoice is wrong, the liability is yours. We work out the correct rate for every element of the job and every material, with the legal basis for each, so you can price at 5% or 0% where it applies and show why you did.
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Pricing a tender
Preliminaries follow the works they support. Retention follows the underlying supply. A variation takes the rate of the element it varies. We set the rate for each section before you submit, so your price is on the right VAT basis.
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Charging 5% or 0% with confidence
New dwellings, most conversions and renovations of long-empty homes are not 20% jobs. The conditions are specific. We tell you whether your job meets them, with the reasoning in writing.
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Certificates and declarations
Care homes, student accommodation and charity buildings need a certificate from the customer before you make the supply. Disabled adaptations need a written eligibility declaration. A missing document can cost you the lower rate.
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Materials versus excluded items
Materials you supply and fit take the rate of the job. Carpets, most appliances and fitted furniture other than kitchens never do. We tell you which is which, so the quote can show them separately.
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The domestic reverse charge
Between VAT-registered businesses in the construction industry, the customer often accounts for the VAT instead of you. It changes who pays HMRC, not the rate, and it does not apply to zero-rated work or to end users.
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A written analysis on file
If the rate is ever questioned, you have a report that states the facts relied on and cites the legislation or HMRC guidance for each rate. Keep it with the job records for six years.
You carry the rate, so price it properly
The liability to charge and account for VAT sits with whoever makes the supply. On a building job that is you. If you charge 5% or 0% and the job did not qualify, the shortfall is yours to settle. That is why so many quotes default to 20%. It is the safe answer for the builder. It is not always the right one, and a client who cannot recover VAT will notice when another tender comes in at a lower rate.
Guessing lower is not the fix. The rate depends on the building, the works and each material, and the tests are set out in the legislation and in HMRC's VAT Notice 708. A new dwelling is 0%. Most conversions and renovations of homes empty for two years are 5%. Repairs, extensions and refurbishment of an occupied home are 20%. Inside a qualifying job, the excluded items still carry 20%.
The domestic reverse charge is a separate question. It decides who pays the VAT to HMRC. It does not decide the rate.
What we give you
Send us the tender, bill of quantities or schedule of works with the drawings and the planning consent. Our line-by-line analysis gives you:
- the right rate for every element of the works, with the legal basis for each
- written reasoning you can rely on if the rate is ever questioned
- answers to reasonable questions while the tender is live
The fee is fixed and agreed before we start. If the job is correctly 20%, we say so, and you can price it knowing that. We do not act as agent with HMRC and we do not file anything for you.
Send us the tender or quote to start.
Questions
Straight answers.
Who is liable if the rate on my invoice is wrong?
You are. The liability to charge and account for VAT sits with the party making the supply. Our analysis is a professional determination of the rate on the facts we are given. It does not move the liability to us, it is not a ruling and HMRC is not bound by it. It does give you a reasoned, documented basis for the rate you charged.
The client says the job is zero rated. Can I take their word for it?
Not on its own. You need the facts that make it so on your file. For a new house that means the planning consent and the approved drawings. For a care home or charity building it means a certificate given before the supply. For an empty home it means evidence of the two years.
Do my subcontractors charge the same rate as I do?
It depends on the job. On a new dwelling, subcontractors zero rate their work too. On a building that needs a certificate, only the main contractor's supply to the person giving the certificate is zero rated and subcontractors charge 20%. The reverse charge may also apply between you.
I have already invoiced part of the job at 20%. What now?
If the correct rate was lower, the remedy is a credit note and a corrected invoice from you to the customer. The customer cannot recover VAT charged in error from HMRC. Our analysis covers invoices already issued as well as the ones still to come.
Next step
Send us the tender documents before you price
Upload your builder’s quote or tender. We look at the project and the pricing and tell you whether a lower rate is worth pursuing, before you commit to anything.
- Fixed fee, agreed up front
- Every rate tied to the legislation
- We'll tell you if it's 20%