VAT Flat Rate Scheme Calculator for General building or construction services
For sole-trader builders, small construction firms, refurbishment contractors, and renovation specialists registered for VAT.
Why this matters for general building or construction services
General construction has one of the lowest service-sector FRS rates at 9.5%, with break-even input VAT at 8.6% of net turnover. Materials-heavy contractors usually clear the Limited Cost Trader test easily — but watch for the CIS Reverse Charge interaction which complicates the FRS turnover calculation.
A general builder with £130,000 net turnover spending £20,000–£35,000 a year on materials clears the LCT goods test by orders of magnitude. FRS at 9.5% wins if input VAT under Standard is below £11,180 (8.6%).
Limited Cost Trader trap
Low risk — usually escapesBricks, timber, plaster, paint, fixings, plumbing supplies, roofing materials — all goods that count toward LCT. A working builder almost always escapes the 16.5% Limited Cost rate; FRS at the proper 9.5% rate may genuinely beat Standard for some material-heavy operators.
Calculator (pre-selected for general building or construction services)
HMRC publishes 51 sector rates from 4% (food retail) to 14.5% (IT, accountancy, legal). Pick the one that best matches your main business activity.
Joining threshold: £150,000.
The 20% VAT on your business purchases (software, equipment, professional fees, stock). Leave blank or use 0 for service businesses with low purchases.
Goods only — excludes services, capital items, food/drink for staff, fuel (except transport sector). If this is below 2% of your gross turnover OR below £1,000/year, your rate becomes 16.5%.
General building or construction services
16.5%
Industry base rate
9.5%
Limited Cost Trader
16.5% (override)
First-year discount
Not applied
Standard scheme — VAT to HMRC
£11,500.00
£12,000.00 output − £500.00 input
FRS — VAT to HMRC
£11,880.00
£72,000 gross × 16.5%
Annual difference
-£380.00
Standard pays HMRC less
Stay on the Standard scheme. You reclaim more input VAT than FRS would save you — switching would cost £380.00 per year.
Break-even: at input VAT of £120 (0.2% of net turnover), the two schemes pay HMRC the same. Below that, FRS wins; above, Standard wins.
Worked example: £60,000 net turnover
Output VAT charged
£12,000
£60,000 × 20% (what customers pay you in VAT)
FRS payable to HMRC
£6,840
£72,000 gross × 9.5%
Break-even input VAT
£5,160
8.6% of £60,000 net — below this, FRS wins
In your first year of VAT registration, the 1% discount drops your effective rate from 9.5% to 8.5%, raising the break-even threshold to 9.8% of net turnover. Use the calculator above with your actual turnover and input VAT figures.
Frequently asked questions
How does the CIS Reverse Charge interact with FRS?
Since 1 March 2021, supplies between VAT-registered CIS contractors are reverse-charged — the customer accounts for the VAT, not you. These supplies are EXCLUDED from your FRS turnover (you don't pay FRS on them). HMRC has explicitly confirmed FRS is rarely beneficial for builders working B2B in the construction supply chain because of this. End-customer (B2C) work still goes through FRS normally.
Are tools and plant hire goods or services?
Plant hire is a service (you're renting, not buying). Hand tools and consumable equipment you purchase are goods. Capital items (plant, vehicles, large tools that go on your balance sheet) are explicitly excluded from the LCT goods test — but consumables under the capitalisation threshold do count.
What is the FRS rate for general building or construction services?
HMRC publishes a flat rate of 9.5% for "General building or construction services" under the VAT Flat Rate Scheme. In your first year of VAT registration, the 1% discount drops it to 8.5%. If your business is classed as a Limited Cost Trader (goods spend below 2% of VAT-inclusive turnover or below £1,000/year), the rate becomes 16.5% regardless of sector.
What is the break-even input VAT for general building or construction services on FRS?
At a 9.5% FRS rate, the Standard scheme pays HMRC the same as FRS when input VAT equals 8.6% of net turnover. Below that threshold, FRS pays HMRC less; above it, Standard wins. For a £60,000 net-turnover business, break-even input VAT is £5,160.