Written for plumbers, gas and heating engineers, electricians, heat pump and drainage firms, bathroom installers doing their own plumbing, and small multi-trade firms serving landlords, anywhere in the UK.
The short version
- Check what you install and for whom.As of Oct 2026, installing energy-saving kit such as heat pumps in homes is zero-rated. Gas and oil boilers never qualify, however efficient.
- Get the signed declaration before you invoice.A bathroom adaptation needed because of a disabled person's condition can be zero-rated, with the eligibility declaration signed first. Age alone is not disability.
- Watch mixed jobs and spring install dates.As of Oct 2026, a bathroom fitted alongside a heat pump is 20%. The tax point decides the rate, so watch spring 2027 install dates.
Repairs, boiler swaps, rewires and bathrooms are standard-rated, but this trade sits on top of several VAT reliefs. Charge too little and the shortfall can come out of your margin when the error is found, because the price you charged is then treated as including VAT.
The rate by job
Energy-saving materials in homes: 0%
Installing heat pumps, solar panels, batteries, insulation, heating and hot water controls and wood-fuelled boilers in homes is zero-rated to 31 March 2027, then 5%, as Budget 2026 confirmed. Gas and oil boilers never qualify. Northern Ireland has had the zero rate since 1 May 2023. As of Oct 2026.
VAT Act 1994 Sch 8 Group 23 and Sch 7A Group 2; VAT Notice 708/6
Adaptations for a disabled person: 0%
Adapting a bathroom, washroom or lavatory in a disabled person's home, where it is needed because of their condition, and supplying listed equipment, is zero-rated. The customer signs the eligibility declaration before you invoice. Age alone is not disability, and a standard suite without adaptation is 20%. As of Oct 2026.
VAT Act 1994 Sch 8 Group 12; VAT Notice 701/7
Grant-funded heating for a qualifying person: 5%
Installing heating appliances, and installing or repairing central heating, for someone aged 60 or over or on listed benefits is 5%, for the grant-funded part only. As of Oct 2026.
VAT Act 1994 Sch 7A Group 3; VAT Notice 708/6
New homes, conversions and everything else
Plumbing and heating in building a new dwelling, supplied to the person building it, is 0%. Converting to a different number of dwellings, or renovating a home empty for 2 years or more, is 5%. Repairs, boiler swaps, rewires and bathrooms are 20%. As of Oct 2026.
VAT Act 1994 Sch 8 Group 5 and Sch 7A Groups 6 and 7
Gas and oil boilers are outside the energy-saving relief however efficient they are, so zero-rating one under that relief is simply wrong.
Two traps on mixed and late jobs
As of Oct 2026, a bathroom fitted on the same visit as a heat pump is 20%. Necessary ancillary work shares the heat pump's rate, but check VAT Notice 708/6 before zero-rating anything HMRC may treat separately.
The tax point decides the rate. As of Oct 2026, unless the relief is extended, a heat pump finished and invoiced on or after 1 April 2027 is 5%, so watch the dates on installs booked for next spring.
| Level-access wet room for a wheelchair user | £9,600 |
| VAT at 20% if there is no signed declaration | £1,920 |
| Invoice to the customer | £11,520 |
| What zero-rating without the declaration costs you if you lose on challenge | £1,600 |
£9,600 / 6, because the price is then treated as including VATUnless you can re-invoice the customer. With the signed declaration on file before you invoice, the job is zero-rated.
Registration, the Flat Rate Scheme and CIS
Materials count in your taxable turnover, so a plumber with a modest labour income can still cross the VAT registration threshold. Watch the rolling 12 months. As of Oct 2026, owners still quote the old £85,000 threshold, which was superseded on 1 April 2024, so check the current figure with your specialist before you rely on it.
As of Oct 2026, the Flat Rate Scheme (for expected VAT-taxable turnover of £150,000 or less) has two rates for this trade: 9.5% for general building or construction services and 14.5% for labour-only building or construction services, each 1 percentage point lower until the day before the first anniversary of your registration. A firm that buys few goods falls into the 16.5% limited cost rate instead.
When CIS applies
Installing heating, water, power and drainage for a builder, developer or main contractor is a construction operation, so the payer deducts CIS from your labour at the rate HMRC's verification of you sets. Work for a homeowner never is. As of Oct 2026.
Finance Act 2004 s.74
CIS work for a builder can also fall under the VAT domestic reverse charge for building services, which changes what your invoice shows. Check it with your specialist before the first invoice to each new builder.
If you work under CIS, your Making Tax Digital qualifying income is your gross turnover before deductions. These were rechecked against Budget 2026 (28 October 2026).
Asked in Greymill
Gas combi: gas and oil boilers never get the energy-saving relief, however efficient. Check whether another relief, such as grant-funded heating, genuinely applies.
Wet room: adapting a bathroom in a disabled person's home is zero-rated where it is needed because of their condition. The customer signs the eligibility declaration before you invoice. No declaration: £1,920 of VAT on top.
The catch: undercharge, and when the error is found, the price you charged is treated as including VAT. Unless you can re-invoice, that can come out of your margin:
Combi at 0%: about £533 (£3,200 / 6)
Wet room at 0%, no declaration, lost on challenge: £1,600 (£9,600 / 6)
Send me your next few jobs and I will rate each one before you invoice.
Ask it about your own business
Paste this into Greymill with your own figures, and Tax & Bookkeeping works it through for your business.
I run a plumbing, heating or electrical business in the UK. We work in [England, Wales, Scotland or Northern Ireland]. Here are my next [number] jobs: [for each, what is being installed, whether the customer is a homeowner, landlord or builder, and whether a grant or a disability is involved]. Tell me the VAT rate for each, what evidence I need on file before I invoice, and whether CIS applies.
More for plumbing, heating and electrical in the UK
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- Can my engineer legally take this job, and who has to notify it?Gas, electrical and water work each has its own gatekeeper, and a job is not finished until the right person has done it, signed it and notified it.Read the lesson
- I went out for a repair and sold a new boiler: can the customer cancel?A homeowner's cancellation right, the emergency exception and the call-out fee all turn on what you put in writing before you started.Read the lesson
- My engineers run their own vans and carry CIS cards, so they are self-employed, aren't they?Status, travel time, on-call, holiday pay and who may work on gas all follow how the work is really done, not what the paperwork says.Read the lesson
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Open the interactive lesson · Every plumbing, heating and electrical lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- When you must register (taxable turnover) (VAT rates by job, schemes and CIS)
- Notice 708/6 sections 2 and 3; VATA Sch 8 Group 23, Sch 7A Group 2 (VAT rates by job, schemes and CIS)
- Notice 701/7 (VAT rates by job, schemes and CIS)
- Sch 7A Group 3 (VAT rates by job, schemes and CIS)
- Sch 8 Group 5; Sch 7A Groups 6, 7 (VAT rates by job, schemes and CIS)
- HMRC Flat Rate Scheme percentages, limited-cost business test and £150,000 joining threshold (VAT rates by job, schemes and CIS)
- FCA DPC regime from 15 July 2026; RAO arts 36A and 60F (Hard cases: finance, tax, electrical and people)
- PERG 6 (Hard cases: finance, tax, electrical and people)
- reg 3(4); Best Practice Guide 4 (Hard cases: finance, tax, electrical and people)
- DESNZ asset-visibility call for evidence, Connect Direct; GOV.UK device-registration process (Hard cases: finance, tax, electrical and people)
- Pimlico Plumbers v Smith (Hard cases: finance, tax, electrical and people)
- reg 3 (Hard cases: finance, tax, electrical and people)
- Work at Height Regulations 2005 reg 2 (definition of work at height) (Pitfalls that embarrass the product)
- A4 publication and A3 withdrawal (Pitfalls that embarrass the product)
- What you can get (Pitfalls that embarrass the product)
- Using HCFCs in existing equipment (Pitfalls that embarrass the product)
- MPC dates; Chancellor letter (The calendar: tax diary, electrical checks and renewals)
- Transitional provision substituting "before 1st November 2026" in reg 3(1)(c) of SI 2020/312 (The calendar: tax diary, electrical checks and renewals)
- MCS:2025 transition to Customer Commitment by 31 March 2027; Ofgem BUS installer guidance, consumer-protection requirement (The calendar: tax diary, electrical checks and renewals)
- "Renew your registration": upper tier renews every 3 years; "You do not need to renew a lower tier registration" (The calendar: tax diary, electrical checks and renewals)