Definition
What it means
Value Added Tax (VAT) is a consumption tax charged on most goods and services in the UK, EU, South Africa, and many other countries. If your business turnover crosses the registration threshold (or you voluntarily register), you must charge VAT on every invoice, file periodic VAT returns, and pay the collected VAT to the tax authority. You also get to claim back the VAT on your business expenses (input VAT).
When you'd register
Compulsory once your taxable turnover crosses the local threshold (e.g. £90,000 in the UK, R1 million in South Africa). Voluntary registration is common for tradespeople buying lots of materials, because the input VAT claim is real money back in your account. Check your local revenue authority for current thresholds.
What VAT looks like on a quote and invoice
Show two lines: subtotal (excluding VAT) and the VAT amount calculated at the local rate. State your VAT registration number. Customers who are themselves VAT-registered will want this number on the invoice to claim the input VAT back.
How QuoteGenio handles VAT
Toggle VAT on in your business settings, set the rate, and every quote and invoice you build will calculate VAT automatically. Reports show VAT collected by period for your VAT return.
Related terms
Other glossary entries you might want next
Closely related terms in the trades-finance vocabulary, with the same plain-English treatment.
GST (Goods and Services Tax)
A consumption tax in Australia, New Zealand, Canada, and India. Equivalent to VAT. Registered businesses charge it on every invoice and remit it.
Invoice
A formal request for payment after work is done. Lists what was delivered, the price agreed, banking details, and the due date.
Markup vs Margin
Markup is the percentage you add to your cost. Margin is the percentage of the final price that is profit. They are not the same number.
Put it to work
Templates that use this concept
Free quote and invoice templates where this term naturally appears.
Testimonials
Trusted by tradespeople
Real tradespeople using QuoteGenio to quote and invoice from their phone, with the trades-finance vocabulary you've just read about.
“Clients love how professional the quotes look. Feels like I upgraded my whole business overnight. The mobile app is a lifesaver.”
Jessica Martinez
HVAC Contractor · Austin, TX
“Roofs are not cheap. Having itemised quotes with labour and materials split helps clients trust my pricing. My acceptance rate has gone up noticeably.”
Marco Davids
Roofer · Cape Town
“My quotes look a lot more professional now. Clients take them seriously and I spend less time formatting documents.”
Megan Daniels
Interior Designer · Birmingham
Read more
Articles that go deeper on this topic
Long-form posts from the QuoteGenio blog that put this concept in real-world context.
What a Free Quoting Tool for Tradespeople Should Do
Not every free quoting tool for tradespeople earns its keep. A plain checklist of what to look for, what to avoid, and what tradies actually use.
Convert a Quote to an Invoice in One Tap, No Retyping
The one-tap convert flow eliminates the retyping, the duplicate invoice numbers, and the mismatched line items that cost tradies hours each week.
How QuoteGenio Works: Quote to Paid in Six Taps
A plain-English walkthrough of the six-tap QuoteGenio flow, from client pick to invoice paid, and why each step is where it is.
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