VAT guide for tradespeople
A plain language summary of the VAT rates and rules that come up most often for plumbers, electricians, heating engineers, and other trades working in Ireland or the UK. This is general information, not tax advice. Check anything you are unsure of with your own accountant or Revenue and HMRC directly.
Ireland
13.5 percent, reduced rate. This is the rate that usually applies to labour and materials for repair, maintenance, and installation work on a home or building. Most day to day callouts fall here.
23 percent, standard rate. Applies to goods generally, and can apply to a job where materials make up more than two thirds of the total charge. This is known as the two thirds rule, and it catches more tradespeople than any other VAT rule. See the full worked example →
0 percent, zero rated. Uncommon for trade work, but can apply to certain qualifying jobs such as work for some charities.
Domestic reverse charge. When a VAT registered subcontractor does construction work for a VAT registered principal contractor, VAT is often not charged on the invoice at all. Instead the customer accounts for the VAT themselves. This comes from Section 16 of the VAT Consolidation Act 2010 and mainly affects subcontractors working for main contractors, not jobs done directly for a homeowner.
United Kingdom
20 percent, standard rate. The default rate for most goods and services.
5 percent, reduced rate. Applies to some residential energy saving and conversion work, such as installing certain insulation or heating controls, or converting a property into a different number of dwellings.
0 percent, zero rated. Applies to some new build residential construction.
CIS domestic reverse charge. Since 2021, VAT registered subcontractors working under the Construction Industry Scheme for a VAT registered contractor generally do not charge VAT on their invoice. The contractor accounts for it instead. Like the Irish version, this is mainly relevant to subcontractor to contractor work, not jobs billed directly to a homeowner.
A quick way to think about it
If you are invoicing a homeowner directly for a repair or installation, the reduced rate (13.5 percent in Ireland, 5 percent for qualifying energy work in the UK, otherwise standard) usually applies. If you are invoicing another VAT registered contractor for construction work as a subcontractor, the reverse charge often applies instead, meaning you charge no VAT and add a note saying the customer must account for it. If you are mostly supplying materials with little labour, check whether the standard rate applies instead of the reduced rate, and see the two thirds rule guide for exact examples.
How JobYard handles this
Every line on a quote or invoice lets you pick the rate that fits, or mark it as reverse charge. If you mark a line as reverse charge, JobYard removes the VAT from that line and prints the correct statutory wording on the document automatically, so you do not have to remember the exact legal phrasing every time.