VAT invoices for builders: what you must show

When you have to register

VAT registration becomes compulsory once your VAT-taxable turnover goes over £90,000 in any rolling 12-month period, or if you expect to pass it in the next 30 days alone. For a builder that counts everything you invoice — labour and materials — not the profit you keep.

What a full VAT invoice must show

• A sequential invoice number, unique within its series.
• Your business name, address and VAT registration number.
• The customer's name and address.
• The time of supply (tax point) and the invoice date.
• A description of the building work supplied, per line.
• The VAT-exclusive amount, the VAT rate and the VAT amount per rate.
• The total VAT-exclusive amount and the total VAT payable in sterling.

The rate trap for builders

New-build dwellings are usually zero-rated, conversions and long-term empty property work are often 5%, and everyday extensions and repairs are 20%. Getting the rate wrong on a five-figure build invoice is expensive, so confirm the property's status in writing before you issue it.

Worked example at 20%

Net total for the job

£1,820.00

VAT at 20%

£364.00

Total the customer pays

£2,184.00

The £364.00 is never your money — you are collecting it for HMRC and paying it over on your next return.

Common questions

How should a builder invoice stage payments?

One invoice per stage, each naming the stage and referencing the agreed schedule, with short payment terms and a clear statement that the next stage begins on cleared funds.

Should material receipts go with the invoice?

You do not have to send them, but saying they are available on request settles most queries before they are asked.

Do I invoice VAT at 20% on an extension?

Almost always yes. Zero and reduced rates apply to new builds and certain conversions or long-term empty properties, not to extensions on an occupied home.