VAT — Key Thresholds and Rates
VAT — Key Thresholds and Rates
Thresholds
Registration threshold
£90,000Deregistration threshold
£88,000(rolling 12 months)
Rates
| Standard rate | 20% |
| Reduced rate | 5% |
| Zero rate | 0% |
5%: some energy-saving materials, residential conversions
0%: new-build residential construction
Domestic Reverse Charge (DRC)
- • Applies to most CIS-reported construction services
- • You DON'T charge VAT — the contractor accounts for it
- • Your invoice must state: "Reverse charge: customer to account for VAT to HMRC"
- • Does NOT apply to end users/consumers
Flat Rate Scheme
- • Fixed % of gross turnover instead of tracking every receipt
- • May save money if your costs are low (labour-heavy trades)
- • Limited cost trader rate: 16.5% if you spend less than 2% of turnover on goods
HMRC VAT helpline: 0300 200 3700 | Check thresholds: gov.uk/vat-registration-thresholds
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