Do I need to register for VAT?
You must register for VAT in the UK once your VAT-taxable turnover passes £90,000 in any rolling 12-month period (the threshold as of April 2024, still in force in 2026). It's a rolling window, not a tax-year window — that's the bit most sole traders miss.
You can also register voluntarily below the threshold. That makes sense if most of your customers are VAT-registered businesses (letting agents, construction firms, commercial landlords) because they reclaim the VAT and you can reclaim the VAT on your own materials, tools and van fuel.
If most of your work is for homeowners, voluntary registration usually makes you 20% more expensive overnight with no upside — homeowners can't reclaim. Stay unregistered as long as you can.
How VAT works on labour vs materials
For a standard-rated job, you charge 20% VAT on the whole invoice — labour and materials combined. You don't get to charge VAT on materials only.
The common exception is energy-saving work (some heating controls, insulation, solar) which can be zero-rated until March 2027. Always check HMRC Notice 708/6 before assuming a job qualifies.
For a clean breakdown your customer can actually read, see our guide to writing a builders quote, or jump straight to building one in Job Snapper's quote builder — it splits labour, materials and VAT automatically.
The CIS reverse charge (this catches everyone out)
If you're a sub-contractor doing construction work for another VAT-registered contractor under CIS, you do not charge VAT on your invoice. The main contractor accounts for it themselves under the domestic reverse charge.
Your invoice still needs to:
- State clearly: "Reverse charge: Customer to pay the VAT to HMRC".
- Show the VAT rate that would have applied (usually 20%).
- Show the VAT amount as a note — but exclude it from the total.
Job Snapper's invoice templates have a reverse-charge toggle built in so you don't have to remember the wording every time.
VAT schemes worth knowing
Flat Rate Scheme
You charge customers 20% as normal but pay HMRC a flat percentage of your gross turnover (typically 9.5% for "Labour-only building or construction services" or 14.5% for "General building or construction services"). Simple bookkeeping, but you can't reclaim VAT on most purchases. Worth it if you're light on materials.
Cash Accounting
You only pay VAT to HMRC when the customer actually pays you — not when you raise the invoice. A lifesaver if customers drag their feet. Pair it with the techniques in our late payments guide.
The 5 mistakes that cost trades real money
- Missing the rolling 12-month threshold. HMRC backdates registration and charges you the VAT you should have collected.
- Forgetting the reverse charge on CIS jobs. You overcharge the contractor, they refuse to pay, the invoice gets reissued — and your cash flow stalls.
- Not keeping digital records. Making Tax Digital is now mandatory for all VAT-registered businesses.
- Reclaiming VAT on personal fuel without mileage records. Easy fix: log business mileage as you go.
- Quoting "plus VAT" to homeowners without warning them. Always quote the gross figure to consumers.
Make VAT effortless on every job
Every quote and invoice in Job Snapper lets you toggle VAT on or off, switch to the reverse charge, and split labour from materials in one tap. Numbers add up automatically, totals match HMRC's expectations, and the PDF looks the part.
Got a question we haven't covered? Check the tradespeople FAQ for quick answers on invoicing, quoting and getting paid.
This guide is general information, not tax advice. Talk to an accountant for your specific situation.