Count preparation, the extra trip to the merchant and clearing up.
For ordering time, transport and risk. Ten to twenty per cent is usual.
20 is the standard rate and applies to ordinary work. Supply and installation of energy-saving materials in homes is zero rated until 31 March 2027 and 5% after that.
How this calculation works
Why variations lose money so often
A variation feels like extra turnover, and it is the single place where margin most often disappears. You are on site anyway, the customer asks whether you can just do this as well, and the answer is usually yes. What does not happen is working out what it really costs and writing it down. At the end there is a line on the invoice the customer was not expecting — or no line at all.
Write it down while you are standing there
A text saying “did a bit extra today” is not a record. A variation sheet is, as long as it is filled in on site rather than from memory that evening. At a minimum: which job, what is being done, why, the hours and materials, the figure, the date, and the customer signing it off. Plus a photo of what you found — that photo settles a conversation about four hundred pounds in ten seconds.
The mark-up is not a price rise
It covers your ordering time, the trip, storage and the risk. Leave it out and you are supplying materials at cost, which only shows up at the year end.
Frequently asked questions
Which VAT rate applies to a variation?
The same one as the main job. For ordinary work that is the standard rate of 20%. If the work is supply and installation of energy-saving materials in a home — a heat pump, solar, insulation, heating controls — it is zero rated until 31 March 2027 and 5% after that, across the UK including Northern Ireland. Source: HMRC VAT Notice 708/6.
Does the customer have to sign?
A written sign-off before you start heads off practically every later argument, and a signature on the screen is a signature in law (Electronic Communications Act 2000). Only a deed needs more than that, and a variation is not a deed.
What if the variation turns out smaller than expected?
Then bill it smaller. Work that drops out belongs in the account just as much as work that is added, and crediting it back buys you goodwill.
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