Builder invoice template
Building work gets paid in instalments, and the paperwork around those instalments is where builders lose money — a stage billed before it was agreed, retention nobody chased, materials a contractor refused to exclude from a CIS deduction. This template bills the stage cleanly; the notes below cover the rest.
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Invoice details
Your business
Adds your VAT number below, plus VAT columns and a VAT section.
Stored on your device only and embedded in the PDF. PNG or JPG, under 1MB.
Bill to (your client)
VAT
CIS (construction)
Domestic reverse charge
Appearance
Items
Discount, deposit & payment
Receiving a deposit can create a VAT tax point. Check HMRC guidance if unsure.
Your business name
Invoice
INV-0001
Bill to
Client name
- Invoice date
- 01/10/2026
| Description | Qty | Unit | VAT | Net |
|---|---|---|---|---|
| — | 1 | £0.00 | 20% | £0.00 |
- Net total
- £0.00
- VAT 20%
- £0.00
- Total VAT
- £0.00
- Total
- £0.00
Billing a job in stages
Set the stages in writing before you start — deposit, groundwork complete, first fix, second fix, practical completion is a typical shape — and say what triggers each one. "Stage 3" means nothing on its own; "Stage 3 — first fix complete (plumbing and electrical carcassing signed off 12 Sept)" is something the customer can verify and pay.
Each stage is a separate invoice with its own number and due date, not a running total. Show what this stage covers and what remains of the contract sum, so the customer can see the job is tracking to the agreed price rather than drifting. Variations get their own lines with their own descriptions — never absorb them into the next stage, because the one thing a customer will genuinely dispute is a stage that suddenly costs more than the schedule said.
Applications for payment, and retention
On commercial contracts you may be submitting an application for payment rather than an invoice. The difference matters: under the Construction Act the payer has to respond with a payment notice, and if they intend to pay less than you applied for they must serve a pay less notice in time. Miss the application date and you wait a whole cycle; they miss the notice and the sum you applied for generally becomes the notified sum.
Retention is the other one to track — commonly around 3–5% held back from each payment, with roughly half released at practical completion and the balance at the end of the defects liability period. Show it as a deduction line on the invoice rather than silently reducing your figure, and diarise both release dates. Unclaimed retention is the most commonly forgotten money in the trade.
Not every job is standard-rated
Renovation and conversion work has its own VAT rates, and pricing at 20% by reflex can cost you the job. The reduced 5% rate can apply to converting a property into a different number of dwellings, converting a non-residential building into a home, and renovating a dwelling that has been empty for two years or more. Building a new dwelling from scratch is zero-rated. Ordinary extensions, repairs and improvements to an occupied house stay at 20%.
The conditions are specific and worth reading properly in VAT Notice 708 before you commit to a price — with an empty-home job, get evidence of the vacancy period on file. None of this arises below the £90,000 threshold if you're not registered.
CIS: the materials have to be yours
On a contractor's job the deduction — 20% verified, 30% unverified, 0% gross — comes off labour only. But a contractor can only exclude materials you actually paid for, and they're expected to be satisfied the amount is reasonable. So keep the supplier invoices: an unsupported materials figure is one the contractor may simply deduct against.
Plant is the trap. Plant hired with an operator is a construction operation and sits inside CIS; hire without an operator doesn't, and scaffolding hire with no labour is outside the scheme entirely. Split those lines. Where both parties are VAT registered the domestic reverse charge applies on top: VAT shown but not charged, with the customer accounting for it — unless they've confirmed in writing that they're an end user.
A typical builder invoice
Example line items you might add:
- Stage 2 — first fix complete (labour) @ agreed price £4,800
- Materials — concrete, blocks, aggregate (invoices attached)
- Variation V3 — additional soakaway, agreed 8 Sept — £640
- Less retention @ 3% — −£163.20
Frequently asked questions
How do builders invoice for staged work?
One invoice per stage, each with its own number and due date, describing what the stage covered and what triggered it. Showing the remaining contract sum alongside reassures the customer the job is still tracking to the agreed price.
What is the difference between an invoice and an application for payment?
On construction contracts an application starts a statutory timetable — the payer must respond with a payment notice, and must serve a pay less notice in time if they intend to pay less. If they fail to, the sum you applied for generally becomes the notified sum.
How should retention appear on a builder’s invoice?
As an explicit deduction line, typically around 3–5%, rather than a quietly reduced total. Diarise the release dates too — usually about half at practical completion and the balance at the end of the defects liability period.
When does building work qualify for 5% VAT?
Chiefly on conversions that change the number of dwellings, non-residential to residential conversions, and renovations of homes empty for two years or more. New dwellings are zero-rated. Extensions and repairs to an occupied home remain standard-rated.
Is CIS deducted from materials?
No — the deduction applies to labour only. But the exclusion covers materials you paid for and can evidence, and the contractor must be satisfied the figure is reasonable, so keep the supplier invoices to support it.