Property and Construction Newsletter 2025

Navigating VAT on Construction Services With instability continuing in the housing market, many people are considering staying put and making renovations to their home. But is there a difference to the end-user when it comes to using Contractors or Sub-Contractors?

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Paula Mason, our VAT Manager compares the VAT treatment of construction services supplied to an end user by a Contractor using the services of Sub-Contractors - to the same services being supplied directly by the Sub-Contractors to the end user.

Building Company

Made up of separate quotes from each of the following:

A quote for all the services required for an all-inclusive price of £25,000 plus VAT.

Builder B for £18,000 plus VAT

To make this comparison let’s consider the following scenario:

They are a VAT registered Contractor using VAT registered Sub-Contractors.

Electrician A for £3,000 plus VAT

Plumber A for £2,000 plus VAT

Mr Smith has obtained planning permission to extend his home. He has received two different quotes:

Painter and Decorator A for £2,000 with no VAT

All of these quotes are addressed to Mr Smith directly.

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