VAT — Key Thresholds and Rates

Thresholds

Registration threshold

£90,000

Deregistration threshold

£88,000

(rolling 12 months)

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