Builder invoice template

How do builders usually invoice?

Builders invoice against a staged payment schedule written into the quote, with each invoice referencing the stage reached and any variation numbers agreed since the last one. A deposit of 10% to 25% is common on domestic work, with the remainder paid at milestones such as foundations, shell, first fix and completion. Retentions of 2.5% to 5% held until snagging is signed off are usual on larger contracts.

Builders in this example give the customer 7 days to pay, after a 20% deposit taken before the work starts. Hourly rates run from £30 to £50. A full day is typically £240 to £400.

What should a builder put on an invoice?

Beyond the legal basics, builders should:

• Reference the quote number and the stage name on every invoice so the running total is easy to reconcile.
• Give each variation its own number and show the agreed price next to it.
• Show any retention held and the date it falls due for release.
• On CIS jobs, split labour, materials, plant and skip hire so the contractor deducts tax only from labour.
• Note that the price excludes building control fees unless you have paid them as agent.

Every UK invoice, whatever the trade, must also show:

• a unique, sequential invoice number
• your business name and address (and company number if you trade as a limited company)
• the client’s name and address
• the invoice date and, for VAT invoices, the date of supply if different
• a clear description of each item of work or goods
• the amount due and when it must be paid
• your VAT number, the VAT rate per line and the VAT total, if you are VAT registered

Do builders charge VAT?

Construction work for a contractor falls under CIS: the contractor deducts 20% (30% if you are not CIS registered) from the labour element before paying you, so show labour and materials on separate lines. If you are VAT registered and the contractor is too, the domestic reverse charge applies and you charge no VAT; write "Reverse charge: customer to account for VAT" on the invoice. Work for private householders is outside both rules. Below the £90,000 registration threshold you charge no VAT at all.

On the Flat Rate Scheme the sector for builders is usually “General building or construction services” at 9.5% of VAT-inclusive turnover, with a 1% discount in the first year of registration. If you spend little on goods you may be a limited cost trader and have to use 16.5% instead. The scheme suits businesses with few VAT-able costs; check it against the standard method with the VAT calculator before joining.