The essentials in 30 seconds
- Your fees are at 20 %, always: an intellectual service does not get the reduced rate, even on a project that does.
- Renovation works on a home completed more than two years ago can be at 10 %, and at 5.5 % for improving energy performance.
- You are not the one applying those rates: works invoices are issued by the contractors, in the client's name.
- The reduced rate assumes a certificate (attestation) from the client, handed to each contractor. Without it, the contractor invoices at 20 %.
- A cost plan that mixes rates without breaking them out announces a false VAT-inclusive budget, and the VAT-inclusive figure is what the client judges you on.
The rule that surprises people: your fees are never at the reduced rate
The reduced VAT rate applies to works carried out on residential premises: labour and materials that transform the building fabric. Your own engagement is an intellectual service of design, coordination and site supervision. It falls under the standard rate of 20 %, whatever the nature of the project it accompanies.
This distinction is not an administrative detail: it follows from the fact that an interior designer is not a general contractor. You do not sell the works, you do not collect payment for them, and you do not re-invoice them. As we set out in our guide to tendering to contractors, works quotes and works invoices are issued by each contractor, in the client's name. Your own invoice covers your fees, and nothing else.
Hence a counter-intuitive but logical consequence: on the same project, the client receives your fee invoice at 20 % and the contractors' invoices at 10 %. Two rates, two issuers, two kinds of service. A client who did not hear this at quote stage discovers it when the time comes to pay, and that is rarely a good conversation.
The three rates in circulation on a renovation project
| Rate | What it covers | Main conditions |
|---|---|---|
| 20 % standard rate | Your fees. Works on a home that is new or less than two years old. Furniture and equipment delivered without integrated installation. Works that amount to construction rather than renovation. | None, this is the default regime |
| 10 % reduced rate | Improvement, conversion, fit-out and maintenance works on residential premises | Premises used as a dwelling, completed more than two years ago, attestation from the client |
| 5.5 % super-reduced rate | Works improving energy performance, and induced works that are inseparably linked to them | Same conditions on the age of the property, plus the energy nature of the works |
Two grey areas come up systematically in flat renovations, and they are the ones that send budgets off the rails:
- Furniture and fit-out. A piece of furniture delivered and installed is not work on the building fabric. Bespoke joinery, designed for the space, fixed and integrated into the structure, may follow a different logic. The line is a fine one, it depends on how genuinely the item is integrated into the building, and the contractor issuing the invoice carries the tax responsibility.
- The scale of the works. When a renovation touches load-bearing elements, or amounts to producing a new structure, it falls outside the scope of the reduced rate. A heavy renovation can therefore switch to the standard rate when the client was expecting 10 %.
Neither of these points can be settled from a cost plan: they are settled with the client's accountant and with the contractor issuing the invoice. Your job is to flag them early, not to rule on them.
The attestation, the document everyone forgets
The reduced rate is not automatic. It is the client (maître d'ouvrage) who certifies that the property meets the conditions, in particular its age and its use as a dwelling. And here is the point almost nobody anticipates: they have to hand an attestation to each contractor that invoices works, not a single one for the whole project.
On a project awarded by trade package (lot), with three or four contractors, that means three or four attestations to produce, at the right moment. Without one, the contractor applies the standard rate, and putting it right afterwards is painful for everybody.
You do not have to sign that document, and you must not sign it in the client's place. But you are the only person on the project who sees every contractor come through: anticipating the attestation at tender stage costs you one paragraph in an email and saves the client a gap of several thousand euros on their budget.
Why this changes your cost plan
A cost plan exists to give the client a reliable order of magnitude for what will leave their pocket. And the client thinks in VAT-inclusive terms, not in figures excluding VAT. If your estimate applies a single rate to items that fall under different rates, the final gap will not be a small imprecision: on a works budget of €80,000, ten points of VAT come to €8,000.
So the discipline is simple: carry the rate item by item, and present a total broken down by rate rather than one opaque VAT-inclusive figure. It is more rigorous, and it also sells better, because a client who sees the breakdown understands they are dealing with someone who knows their subject. How to build the estimate itself is detailed in our guide to estimating renovation costs.
Watch out too for additional works that appear during the build: they follow the regime of the works they attach to, and a variation order priced without its rate is a nasty surprise on a delay timer. It is one of the discipline points in our guide to site supervision.
So, what about Nodal?
This is exactly the distinction the product encodes. In Nodal, a works cost plan line arrives with the reduced rate by default, a fee quote line with the standard rate, and totals are broken down by rate rather than melted into a single VAT-inclusive figure. You can change the rate line by line, which is essential the moment a furniture item sits next to a plumbing item.
In practice: your client sees an estimated works budget with its breakdown, and a separate fee invoice, with no possible confusion between the two. It is also what keeps the tracking document usable right through to the end of the project.
Article published on August 23, 2026. The rates and conditions presented here are a professional summary intended to frame a cost plan, up to date at that date; they do not constitute tax advice. VAT rules on works change with the finance acts and include special cases. Have the application of the rates validated by the client's accountant and by the contractors issuing the invoices.