Bookkeeping for the self-employed electrician: VAT, materials and the van
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
As a subcontractor for a contractor you reverse-charge the VAT, for consumers you charge 21 per cent, and the supply and installation of solar panels on or near homes carries the zero rate.
- The reduced 9 per cent rate for work on homes over two years old does not apply to electrical work.
- On reverse-charged jobs you advance the VAT on materials; filing monthly gets it back sooner.
- Materials passed on are turnover, not a disbursement; stock on 31 December belongs on the balance sheet.
- Work running across the year end is valued as work in progress.
An electrician works two markets at once: one week as a subcontractor on a building site, the next in people's homes for a fuse box or a charging point. For your records those are two different worlds, especially when it comes to VAT. This article sets out which rules apply per client type, how to handle materials and tools, and which items in this trade most often lead to an additional assessment.
VAT: who is your client?
The main question on every invoice is not what you did, but for whom. If you work as a subcontractor for a main contractor on physical work, the reverse-charge rule applies: you put no VAT on your invoice, but the words VAT reverse-charged plus your client's VAT identification number. He declares the VAT and deducts it in the same return. Read the details in reverse-charging VAT in construction and when you reverse-charge VAT.
If you work directly for a consumer, a homeowners' association or a company that is not itself a construction firm, you reverse-charge nothing and simply charge VAT. For electrical work that is the 21 per cent rate. The reduced 9 per cent rate on work to homes over two years old only applies to a short list of activities, such as painting, plastering and fitting insulation material; electrical work is not on it.
| Situation | On your invoice | Watch out |
|---|---|---|
| Subcontracting for a contractor | VAT reverse-charged, 0 on the invoice | state and check the client's VAT ID |
| Consumer: fuse box, wiring, fault | 21% | communicate prices including VAT |
| Solar panels on or near a home | 0% on supply and installation | applies to the residential situation, not every roof |
| Charging point at a consumer's home | 21% | does not fall under the zero rate |
| Hiring out staff to a contractor | VAT reverse-charged | watch [hirer's liability](kb:inlenersaansprakelijkheid-uitzendkrachten) |
Materials: you advance the money, the client pays later
Cable, conduit, breakers and fittings you buy and pass on. With reverse-charged jobs that has an awkward side: you do pay VAT to your wholesaler, but you invoice without VAT. You only get that input VAT back with your next return, so until then you are financing it. On large jobs that runs into thousands of euros. In those situations file monthly instead of quarterly; that gets the VAT back sooner.
If you pass on materials with a mark-up, that is simply turnover and not a disbursement. Put it as a separate line on your invoice, with the same VAT treatment as your labour. See passing on costs to your client. Track materials you keep in stock separately, because on the balance sheet of 31 December they belong as stock and not as costs of that year.
Worked example: a job for a contractor
- Materials purchased
- € 2,000 excl, € 420 VAT paid
- Labour, 40 hours at € 55
- € 2,200
- Invoice with reverse charge
- € 4,400, no VAT
- VAT return that quarter
- € 420 to be refunded
Result: Your turnover is € 4,400 and you get € 420 of VAT back. But you advanced that € 420 for up to three months
Tools, van and workwear
Small tools under 450 euros you deduct at once; more expensive equipment such as a test instrument, cable reel system or battery set you capitalise and depreciate. See deducting or capitalising tools. If in one year you go above the investment threshold, the small-scale investment deduction gives you extra relief.
- The van: a commercial vehicle is usually more advantageous for an electrician than a passenger car, but private use counts.
- Mileage: if you drive your private car, keep mileage records and apply the fixed allowance per kilometre.
- Workwear: deductible with a company logo or as prescribed protective clothing; ordinary jeans are not. See deducting workwear.
- Certification and refresher courses, including calibration of your test equipment, are training and business costs.
- Insurance: business liability is not a luxury in this trade, because damage from an installation fault adds up quickly. See business insurance.
The blocked account with larger clients
If you work structurally as a subcontractor, the main contractor sometimes asks for a blocked account: an account into which he pays the part covering payroll taxes, so he covers his chain liability. For a freelancer without staff that is by no means always necessary. Read when you need a blocked account before opening one, because it costs time and administration.
Jobs across the year end and payment behaviour
An installation that starts in November and is handed over in January partly belongs to the old year. The part you have worked but not yet invoiced is valued as work in progress on your balance sheet. If you skip that, you shift profit into the next year, and that is exactly what an inspector looks at.
On larger jobs agree instalments: a down payment at the start, one on delivery of the materials and the rest on completion. Book those instalments properly; a down payment is not yet turnover, but the VAT is often already due the moment you send the invoice. If a contractor does not pay, the statutory payment term applies and you may charge collection costs.
Frequently asked questions
Do I always have to reverse-charge VAT when working in construction?
No, only when you work as a subcontractor for a contractor on physical work. If you work directly for a consumer or for a company that is not itself a construction firm, you simply charge 21 per cent.
Does the zero rate for solar panels also cover my labour?
For the supply and installation of solar panels on or near homes the zero rate covers the whole, including fitting. You buy in with VAT and reclaim it as usual; the zero rate is not an exemption.
May I pass on materials without a mark-up?
You may, but it remains turnover and not a disbursement. A mark-up of ten to twenty per cent is common to cover your purchasing time, transport and risk.
Do I need a blocked account as a self-employed electrician?
Only if your client asks for it and your work falls under chain liability. Without staff it is often unnecessary; discuss it before you start the job.
My client wants me to work only for him. Is that a problem?
It makes your position vulnerable. Fixed hours, working under direction and a single client are together the building blocks of employment. See false self-employment and the DBA Act.
Sources
- Reverse charge for subcontracting and hiring out staffBelastingdienst · belastingdienst.nl
- Work on homes older than 2 yearsBelastingdienst · belastingdienst.nl
- VAT rates: 21%, 9% and 0%Belastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
