VAT rates in the construction industry (0%, 5%, 20%)

There are occasions when plumbers – and, indeed, anyone in construction can charge VAT at 5%. But what are the rules?

Standard rate of VAT – 20%

Generally, plumbers charge VAT at 20% on:

Most domestic repair and maintenance work
Work to newly-built structures that don’t fit the zero rate criteria (see below)
Some work to existing structures, such as extensions

Reduced rate of VAT – 5%

In some cases, plumbers can charge VAT at 5% on:

Installation of energy-saving materials (subject to certain conditions)
Residential conversion work, such as converting a house into flats or vice versa
Renovating a house or flat that has been empty for at least two years

Zero rate – 0%

There will be 0% VAT for services such as:

Work on new build houses, including the supply of certain appliances
Services for a disabled person’s home to suit their condition
Work on qualifying buildings (usually buildings for charitable purposes or non-business use, such as Scout Halls or a Village Hall) but you can only charge zero rates if you are the main contractor and not employed by another firm to support with the work.

You can check the details of any projects with the list on HMRC’s website to be sure you have invoiced the correct rate.