If you are VAT registered, your quotes should show VAT so the client knows the real cost. If you aren't registered, you must not add VAT. That's the rule in the UK and in most VAT countries.
How to show VAT on a quote
- List each item at its price excluding VAT.
- Show the subtotal, the VAT rate and amount, and the total including VAT.
- Include your VAT registration number.
Example: labour £1,800 + materials £1,200 = £3,000; VAT at 20% = £600; total £3,600.
Quoting consumers versus businesses
Businesses usually reclaim VAT, so they compare net prices. Consumers pay the full amount, and in the UK prices given to consumers should include VAT. For homeowners, lead with the VAT-inclusive total.
Reduced and zero rates
Some work carries a reduced or zero rate. In the UK, for example, the installation of certain energy-saving materials in homes is currently zero-rated. Check the rules for your trade, and show each rate separately if a quote mixes them.
What if you register for VAT after quoting?
If you become VAT registered before the work is invoiced, you may have to charge VAT even if the quote didn't show it. That's a good reason to note on quotes that "prices exclude VAT, which will be added if applicable".