Guide
Should I register for VAT as a tradesperson?
Updated 2 October 2026 · 4 minute read
VAT is one of the biggest decisions a growing trade business makes, because most of your customers are homeowners who can't claim it back.
When you must register
- Looking back: if your VAT-taxable turnover in the last 12 months goes over £90,000. You must register within 30 days of the end of the month you went over.
- Looking forward: if you expect your turnover in the next 30 days alone to go over £90,000.
It's a rolling 12 months, not the tax year, so check it every month as you get close.
Should you register before you have to?
If your customers are mainly homeowners, registering adds 20% to what they pay, because they can't reclaim VAT. If you mostly work for VAT-registered contractors or businesses, it costs them nothing extra and lets you reclaim VAT on your tools, van and materials, so voluntary registration can make sense.
Prices you show must include VAT
Once you're registered, any price you show a consumer, on your website, in an advert or in a quote, must include VAT. Don't quote homeowners “plus VAT”.
The Flat Rate Scheme
If your VAT turnover is £150,000 or less, the Flat Rate Scheme lets you pay a fixed percentage of your turnover instead of working out VAT on every purchase. The percentage depends on your business type:
| Business type | Flat rate |
|---|---|
| General building or construction | 9.5% |
| Labour-only building or construction | 14.5% |
| Limited cost business (spends very little on goods) | 16.5% |
The domestic reverse charge
Since 1 March 2021, when a VAT-registered subcontractor does construction work for a VAT-registered contractor and it's reported under CIS, the contractor accounts for the VAT instead of you. It doesn't apply to work for homeowners, or where the customer tells you in writing that they're the end user. See our CIS guide.
VAT is worth a conversation with an accountant before you register. For the rest of the setup, see our going self-employed checklist.
See what yours would look like
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Sources
- GOV.UK: VAT registration, when to register
- GOV.UK: VAT Flat Rate Scheme, how much you pay
- GOV.UK: VAT domestic reverse charge technical guide
- Business Companion: providing price information (updated April 2026)
Prices change. Figures were checked on the date above; check the provider's site for today's price.