Quote vs estimate: what UK builders and trades need to know.

Quote, estimate or provisional sum: which is which

In the UK, a quote is a fixed price the client can hold you to once they accept it; an estimate is a best guess, but the final bill must still be reasonable.

What a quote commits you to

Citizens Advice tells homeowners that a quote is "a promise to do work at an agreed price" and that, once they say yes, it's a binding agreement whether it's written down or not. It says a trader can only charge more than the quote when:

• the client asks for extra work that isn't in the quote, or
• you tell them extra work is needed and they agree to pay more for it, or
• the price was an obvious mistake.

Citizens Advice also says you can't charge more because your own costs have gone up since you sent the quote. If materials prices worry you, say how long the price is valid for, and quote again when it runs out.

The law behind this is section 50 of the Consumer Rights Act 2015: what you say or write to a consumer about the service becomes part of the contract if they rely on it. A written quote is exactly that.

What an estimate commits you to

An estimate isn't a free pass. Section 51 of the Consumer Rights Act 2015 says that where the contract doesn't fix a price, the consumer pays "a reasonable price for the service, and no more", and that what's reasonable is "a question of fact". Citizens Advice tells clients who get a bill well above an estimate to dispute it, and to weigh the estimate, any changes and why they happened, and things outside your control such as weather or materials going up.

So if you give an estimate, tell the client as soon as you know it will be exceeded, and why. Section 52 adds that if no finish date is agreed, the work must be done in a reasonable time.

Which one to send

• Send a quote when you've seen the job, the spec is agreed and you can price every line. Clients prefer it: Citizens Advice's own advice to homeowners is "Get a quote - not an estimate".
• Send an estimate when you're pricing from photos or a phone description, or the client hasn't chosen the spec yet. Label it an estimate on the document, not just in the email.
• Send a quote with provisional sums when most of the job is clear but one part isn't: what's behind the plaster, the engineer's steel sizes, the state of a floor you can't lift yet. Give each provisional sum its own line, say what it covers, and say it will be adjusted to the actual cost with the client's say-so.

What to put on the document so there's no argument later

Citizens Advice tells homeowners a quote should include:

• a fixed total price, not a daily rate
• a breakdown of the work and materials
• separate costs for each material and part of the work
• how long the price is valid for
• whether the price includes VAT
• when the price can go up, for example only if the client agrees to extra work

That's the checklist your client is reading from. Meet it and your quote looks like the safe choice. The builder quote template has these lines laid out, and how to price variations covers agreeing extra work in writing.

VAT on quotes and estimates

If you're VAT registered, show the price before VAT, the VAT and the total. The standard rate is 20% (GOV.UK, "VAT rates"). If you're not registered, don't add VAT, and say so on the document. You must register once your taxable turnover for the last 12 months goes over £90,000, or you expect it to in the next 30 days (GOV.UK, "When to register for VAT"). If a big job could take you over, check with your accountant before you quote it. For wording you can copy, see VAT quote wording.

Quoting in the client's home: the 14-day cancellation rule

If the contract is agreed in the client's home, or at a distance (by email or phone) rather than at your premises, the Consumer Contracts Regulations 2013 usually give the client 14 days to cancel a service contract (regulations 29 and 30). If you don't give them the cancellation information, that period can run for up to 12 months longer (regulation 31). Get an express request before starting during the cancellation period. If the contract was agreed in the client’s home, keep that request in writing or another format they can save. If they cancel, you can charge proportionately for work already done only if you had a valid request and gave them the required information about cancellation and early-start charges (regulation 36). The regulations don't apply to building new houses or substantially new buildings by conversion (regulation 6). Your trade body or a solicitor can tell you how this applies to a particular job.