VAT Registration for UK Tradespeople: When, Why, and How

Do you need to register for VAT?

If your taxable turnover exceeds £90,000 in any rolling 12-month period, you must register for VAT with HMRC. But even below this threshold, voluntary registration can sometimes benefit your business.

This guide explains the rules, the options, and how to handle VAT on your invoices once you are registered.

The VAT registration threshold

The current compulsory VAT registration threshold is £90,000 (as of 2024/25). You must register if:

• Your taxable turnover in the last 12 months exceeded £90,000, or
• You expect your turnover to exceed £90,000 in the next 30 days alone

Use our VAT calculator to quickly add or remove VAT from any amount.

Voluntary VAT registration

Even if your turnover is below £90,000, you might benefit from voluntary registration if:

• Most of your customers are VAT-registered businesses (they can reclaim the VAT you charge)
• You spend heavily on materials and tools (you can reclaim VAT on your purchases)
• You want to appear more established and professional

If most of your customers are domestic homeowners, voluntary registration usually just means higher prices for them, so it is less beneficial.

The Flat Rate Scheme

The Flat Rate Scheme simplifies VAT for small businesses. Instead of tracking VAT on every purchase, you pay a fixed percentage of your gross turnover to HMRC.

Common flat rate percentages for trades:

• General building: 9.5%
• Plumbing: 9.5%
• Electrical: 9.5%
• Painting and decorating: 9.5%
• Roofing: 9.5%

This can be simpler than standard VAT accounting, but may not always save you money — especially if you buy a lot of materials.

What VAT invoices must include

Once VAT-registered, your invoices must include additional fields:

• Your VAT registration number
• The VAT rate applied to each line item
• The VAT amount
• The total including VAT

InvoiceAdept handles all of this automatically — read about our VAT invoicing feature.

Making Tax Digital and VAT

VAT-registered businesses are already required to keep digital records and file VAT returns through MTD-compatible software. InvoiceAdept keeps your invoice records fully digital and export-ready for your accountant or bookkeeper.

Start creating VAT invoices

Try InvoiceAdept free — automatic VAT calculations, professional templates, and MTD-compliant records from day one.