We use cookies to keep you signed in and to see what's working and what breaks. No advertising cookies, nothing sold. Details in our Cookie Policy.

United Kingdom

Is this job 20%, 5% or zero rated?

Most builders quote everything at the standard rate because it is the safe assumption. On a new dwelling, a qualifying conversion or a house empty two years, it is also the wrong one, and it is money off your price.

Pick the closest published class. The conditions under it are the ones you have to be able to evidence.

Before VAT. Labour and materials together, as you would quote them.

Pick what the work is

The rate follows the work, not the trade. The same plasterer is zero rated on a new dwelling, 5% in a two-year empty house and 20% on a kitchen refit next door.

Every published class, and what each one depends on

  • Construction of a new building

    0%

    designed as a dwelling or for relevant residential/charitable purpose. supplied in the course of construction. valid certificate held where RRP/RCP.

  • First sale or long lease of a new qualifying building

    0%

    qualifying building. person constructing status. first grant of a major interest. not a holiday home.

  • Conversion for a registered housing association

    0%

    non-residential converted to residential. supplied to the housing association. services closely connected to the conversion.

  • Sale or lease after conversion of a non-residential building

    0%

    never used as a dwelling or vacant 10+ years. converted to dwelling or RRP. certificate where needed.

  • Qualifying conversion

    5%

    changes the number of single-household dwellings, or to multiple occupancy, or to RRP. the change in dwelling count actually occurs.

  • Renovation of empty residential premises

    5%

    dwelling vacant 2+ years immediately before work starts.

  • Energy-saving materials, qualifying heating equipment, mobility aids for over-60s

    5%

    within the Notice 708 / 708-6 scope lists.

  • Everything else

    20%

    repair, maintenance and extension of existing dwellings. all commercial work. professional services. plant hire. work on non-qualifying buildings.

Questions this page answers

Is all construction work 20% VAT?
No. Building a new dwelling is zero rated. A conversion that changes the number of dwellings, and a renovation of a home empty for two years or more, are reduced rated at 5%. Repair, maintenance and extension of an existing dwelling, and all commercial work, are standard rated.
When can I charge 5% VAT on a renovation?
When the property has been empty for two years or more immediately before the work starts, or when the work is a qualifying conversion that changes the number of single-household dwellings, converts to multiple occupancy, or converts to relevant residential use.
What proof do I need for the reduced or zero rate?
Evidence that the conditions were met, which is what the conditions listed against each class are for. Where the work is for relevant residential or charitable use, that means holding the customer certificate before you invoice.
What happens if I charge the wrong rate?
Charge too little and the shortfall is yours, with interest, when it is picked up. Charge too much and you have quoted above a competitor who checked, on identical work.

Or set it once on the job and stop deciding per invoice

Record what the work is when you set the job up, and every invoice off it carries the right rate with the class it came from written underneath. The next invoice does not need you to remember which house was the empty one.

The same engine decides the reverse charge on the same document, so a CIS subcontractor's invoice comes out with the VAT shown, not charged, and the deduction already off the labour.

Open the demo businessRead the VAT rate guide

Where these figures come from

Other free tools

All free toolsAll guides