The van is not free because it is already on the drive. Fuel, insurance, tyres, MOT, finance or replacement — that is a year of money. If it never hits a quote, it hits evenings.
The formula
Overhead in the rate = annual overheads ÷ billable hours
Same shape as the true hourly rate. Pay-you-need plus overheads, all divided by billable hours. Here we isolate the overhead slice so you can see the van.
Worked year (round numbers, same shape as the hourly-rate example):
| Overhead | Year |
|---|---|
| Van (finance or wear, insurance, fuel, tax, MOT) | £7,200 |
| Public liability and tools cover | £800 |
| Tools and consumables you do not bill | £1,200 |
| Accountant | £900 |
| Phone, lead sites, cards, software | £1,500 |
| Tickets, training, other | £400 |
| Annual overheads | £12,000 |
Billable hours 1,196. Overhead in the rate ≈ £10/hour. On a six-hour chargeable day that is £60 of van and bills inside the labour, before you have bought a single fitting.
£12,000 ÷ 1,196 ≈ £10 / billable hour.
Per job instead of per hour
If you think in jobs: 200 invoiced jobs a year → £12,000 ÷ 200 = £60 of overhead each job must carry, on average. A 45-minute tap washer cannot carry the same as a week-long bathroom unless you have a minimum call-out.
| Job type | Overhead it must cover |
|---|---|
| Average job (200 / year) | £60 |
| Minimum call-out (still a van run) | At least a slice of that £60 |
| Week on site | Several days of the £10/hour |
What people miss
Charging the van twice. If £10/hour is already in labour, do not add “plus van £40” on the same quote unless you pulled it out of the rate.
Fuel as a surprise. A 40-mile each-way job is not a town call-out. Either a travel line or a higher minimum — written before you leave.
Tools you bill as extras and as overhead. A blade you will never use again can be on the job. A drill you own for five years is overhead.
CIS take-home vs overhead. Deductions change what lands in the bank. They do not shrink the insurance invoice. Set the rate off money you keep, then still cover the van.
Related guides
FAQ
- Should the customer see a van line?
- Only if it is not already in the labour rate. One recovery method. Two is an argument.
- What if I cycle to local jobs?
- You still have insurance, tools, phone, and accountant. The van line shrinks; the rest does not.
- Are merchant trade-counter trips overhead or materials?
- The fuel and time are overhead (or unpaid hours in your rate). The goods are materials plus wastage plus markup.
- How often should I redo the yearly list?
- When insurance renews, when fuel jumps, or once a year. If the bank disagrees with the spreadsheet, the hours or the van cost moved.
