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
Revenue current VAT rates · Revenue construction services guidance
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 →
9 percent, second reduced rate. Since 1 January 2025, this applies to the qualifying supply and installation of a heat pump heating system where the same supplier provides and installs the system. Supply-only and separately contracted work can have different VAT treatment, so check the contract rather than assuming every heat pump line is 9 percent.
0 percent, zero rated. Revenue currently lists the qualifying supply and installation of solar panels on private dwellings and recognised schools at the zero rate. The zero rate for private dwellings has applied since 1 May 2023. Current Revenue guidance does not state a 31 December 2026 end date. Supply-only and non-qualifying properties can be treated differently.
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
HMRC VAT Notice 708 · HMRC construction reverse charge
20 percent, standard rate. The default rate for most goods and services.
5 percent, reduced rate. Applies to residential conversion work (changing the number of dwellings in a building) and similar categories unrelated to energy-saving installations.
0 percent, zero rated. Currently the rate that matters most for trades: heat pumps, solar panels, battery storage, and insulation installed in residential property are zero-rated under a temporary measure, confirmed through 31 March 2027. From 1 April 2027 these are due to revert to 5 percent, not 20 percent. Standalone repair or maintenance of equipment that's already installed does not qualify, only a new installation does.
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 general repair or installation, the reduced rate (13.5 percent in Ireland, otherwise standard in the UK) usually applies. A qualifying supply-and-install heat pump contract in Ireland can use the 9 percent rate, while qualifying solar installation in Ireland can use the zero rate. In the UK, qualifying energy-saving material installations can currently be zero rated through 31 March 2027. 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. For a general job that doesn't fall into one of these special categories, and 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 select the VAT treatment you believe applies. JobYard supports Irish and UK rates, the Irish two-thirds check, and construction reverse-charge documents. It does not decide whether a relief or reverse charge legally applies to a particular contract, so unusual or mixed jobs should still be checked with Revenue, HMRC or your accountant.