Choosing the VAT rate on your quote
You set the VAT rate when submitting a quote. The standard rate is 20%. If the work qualifies for 5% or 0%, or you're not VAT registered, change the rate before you submit.
Quotes on Beams are priced without VAT. The VAT rate you choose sets what the customer pays on top. When you're submitting a quote, the rate will default to 20% if you are VAT registered, or 0% if you're not.
How to change the rate
- Find the VAT line. In the 'Project cost' panel on the right of your quote, you'll see 'VAT at 20%'.
- Click 'Change VAT rate'. Three options appear: 0%, 5% and 20%.
- Pick a rate. 'Customer pays inc. VAT' updates straight away, so you can see the total the customer will be asked to pay.
- Click 'Done', then submit your quote as normal.
The rate applies to the whole quote.
Which rate to choose
Most jobs on Beams are 20%. A lower rate only applies when the work meets HMRC's conditions.
- 20% (standard). Kitchens, bathrooms, extensions, loft conversions and refurbishments of a home people live in.
- 5% (reduced). Renovating a home nobody has lived in for at least two years before work starts. Changing the number of homes in a building, such as turning a house into flats or two flats into one house. Converting a non-residential building, like a barn or shop, into a home.
- 0% (zero). Installing qualifying energy-saving materials, such as insulation, draught-proofing, heating controls, solar panels, heat pumps and home batteries. Building work for a disabled customer that's needed because of their condition, such as a ramp, wider doorways or an adapted bathroom or toilet. Building a brand new home.
The 0% rate on energy-saving materials is temporary. It runs until 31 March 2027, then goes up to 5%.
If you're not VAT registered
Businesses with taxable turnover under £90,000 a year don't have to register for VAT. If you're not registered, you can't charge VAT at all, so choose 0%. Add a line to your notes for the customer saying you're not VAT registered, so they know why there's no VAT on the quote.
When only part of the job qualifies
One rate covers the whole quote. If a job mixes work at different rates, say a kitchen refit with new loft insulation, leave it at 20% and message your Beams planner before you submit.
Getting it right is your responsibility
You choose the rate, and you answer to HMRC for it. If a lower rate wasn't due, HMRC can ask you for the difference. So before you change it:
- Check the conditions. Make sure the work meets them in HMRC's guidance, linked below.
- Keep evidence on file. For an empty home, a letter from the council or council tax records. For work for a disabled customer, a signed eligibility declaration from them. For energy-saving work, the product details.
- Explain it to the customer. Say in your notes why you've used a lower rate, so they understand their total.
Beams can't give tax advice. If you're not sure, speak to your accountant.