Planning tool
Which VAT rate does your work fall under?
Most renovation work carries VAT at 20%. Four situations do not, and on a whole-house job the difference runs into five figures. Answer three questions and we will tell you which rate the work is likely to sit in, and what your builder needs to apply it.
The rates in full
0%
Building a new dwelling from scratch A VAT-registered builder zero-rates their labour and the materials they supply on a genuinely new dwelling. If you are managing it yourself, the DIY Housebuilders’ Scheme lets you reclaim the VAT on materials you bought.
5%
Converting a building into a different number of dwellings A house into flats, flats back into a house, or a non-residential building such as a barn, chapel or office into a home. The reduced rate covers the conversion work itself.
5%
Renovating a home that has been empty for two years or more The property must have been unoccupied for at least two years before the work starts. Councils will usually confirm the empty period in writing, and the builder needs that evidence on file.
0%
Installing qualifying energy-saving materials Insulation, solar panels, heat pumps and similar installed in a home are zero-rated until 31 March 2027, then 5%. It applies to the installation as a supply, not to materials bought separately.
20%
Everything else An extension, a loft conversion, a new kitchen or a refurbishment of a home somebody lives in is standard-rated.
A guide to the right question, not tax advice. The rules are in HMRC VAT Notice 708; the rate is the builder’s responsibility to get right, and they will want evidence before charging anything below 20%. A builder who is not VAT-registered charges no VAT at all, which is not the same thing as zero-rating.