Whats required if builder supplies materials?

[gwebstech]

Hi all

 

Im starting a new build soon, and the bricky im using is getting the bricks on his account - but when i come to claim the VAT back, dont the invoices for nay materials have to have my name and address on them? i eman as far as the taxman is concerned, i thought i read that somewhere.

 

thanks

[ProDave]

If someone supplies AND fits materials to a new build, they have to be charged to you zero rated.

[Thedreamer]

@gwebstech is your brickie vat registered? 

[SteamyTea]

Trust is what is required.

[Ferdinand]

In theory you get the VAT, but you do not get control over the prices and may lose some benefit there.

 

Ferdinand

[Temp]

What @ProDave said. 

 

If someone "supplies and fits" (eg provides materials and labour) both must be supplied at the lower of the two rates. If it's a new house labour is zero rated so the materials must be zero rated to you as well. This is in VAT 708.

 

If the brickie charges you VAT on materials and you pay it in error you cannot reclaim the VAT from HMRC. 

 

If the brickie is VAT registered he can reclaim the VAT from HMRC so won't be out of pocket.

 

If your builder is not VAT registered you should buy the materials yourself from the builders merchant and in that case you can reclaim the VAT. You need a VAT invoice in your name.

Edited September 8, 2019 by Temp

[nod]

Builders merchants give so little discount now 

That you will find setting your own account up will give you the same discount as he is getting 

[Declan52]

I would be pricing the bricks up myself to make sure he isn't creaming a bit of the top. 

[nod]

4 minutes ago, Declan52 said:

I would be pricing the bricks up myself to make sure he isn't creaming a bit of the top. 

A friend of mine has been using a company called Brick Hunter 

Great prices and service 

[recoveringbuilder]

There are very few tradesmen I would trust to charge you what they actually pay, before we started this we got a price from a local company to supply and build the whole thing, they detailed out everything they would be supplying and right away we clocked they would be charging top dollar for stuff, first on the list was concrete blocks at £1.10 each, we eventually paid 69p!

[Vijay]

Isn't it the point of the discount from suppliers, for the trades people getting the materials, for their pockets and also to sway them going to a particular supplier. 

 

If you want the cheaper price, do the legwork and email/call everyone that can supply. A trades person isn't gonna spend the time we might on getting the best price

[recoveringbuilder]

Howdens, we have had an account with them since 2007 when we did our last self build, there has been several kitchens bought through it as well as doors, flooring and lots of incidental items, what annoys me about them is that it seems to depend how much you buy in any given year as to how much discount they give you, we priced up for a basic kitchen we were going to put in the cottage before we resold it but their price was far too much for what it was and they wouldn’t budge on price, we have a small utility room that needed 3 units, they wanted £400 per unit! We didn’t even give them a chance to price for the kitchen as we’d already decided to go bespoke but going by what they wanted to charge per unit we were as well getting it made, then you hear of others getting the price reduced and wonder why they can do it for some and not others, of course their ‘sale’ is coming up soon so that prompted a call from them last week to drum up business!

[K78]

Many contractors add 20% to anything they supply. 

[Ed Davies]

On 08/09/2019 at 05:18, Temp said:

If your builder is not VAT registered you should buy the materials yourself from the builders merchant and in that case you can reclaim the VAT. You need a VAT invoice in your name.

 

Indeed. Just to be clear why, if they're not VAT registered and they buy the materials then they'll pay VAT on them and, because they can't reclaim it,  pass the cost on to you but you won't be able to reclaim it either because it wouldn't be a VAT invoice. A bad combination.

[redtop]

On 08/09/2019 at 15:36, K78 said:

Many contractors add 20% to anything they supply. 

yep very common practice, and also wrong and probably illegal (well it should be if it isn't).  I would expect a builder to negotiate better prices than I can; that's fine but getting a product price of £1 and then telling me its costing £1.50 is fraud.  tell me its a quid and then charge more for labour. and if that makes the labour look expensive that's another matter but this practice of lying about the cost of materials is shocking.

[joe90]

My builder offered to supply things I wanted (that was not In his fixed price fir the build and at zero VAT) plus 5% to cover admin charges (and again at zero VAT). Seemed fair to me.

[PeterW]

9 minutes ago, redtop said:

yep very common practice, and also wrong and probably illegal (well it should be if it isn't).  I would expect a builder to negotiate better prices than I can; that's fine but getting a product price of £1 and then telling me its costing £1.50 is fraud.  tell me its a quid and then charge more for labour. and if that makes the labour look expensive that's another matter but this practice of lying about the cost of materials is shocking.

 

Its not illegal for good reason and some of this depends on the cost of capital. If you’re paying for a day rate, then I would expect BM trips etc to be kept to a minimum as otherwise a £5 box of screws can cost you £20 by the time travel time is taken into consideration. 

 

Adding on a margin is not unusual as it could well be that specific jobs require research, ordering etc, none of which you probably “pay for” in a day rate. There is also the cost of holding stock for things where you don’t purchase for a job but have to buy in bulk. 

 

Customer supplied parts can be an even bigger issue, where a customer picks a certain tap or shower and asks you to fit it. You find it doesn’t come with the correct fittings, it been opened and someone has gone through all the bits “to see how it works”, or it’s damaged in the box. At that point, the customer wonders why when you said a couple of days it becomes three, and their eBay special purchase now starts to look expensive ....

 

 

[Jeremy Harris]

I bought most of the stuff for our build.  One lesson learned is to never underestimate how much time it takes to collate accurate lists of all materials, parts etc needed.  It's easy to spend a couple of hours just putting together an order for all the electrical items, and that's when I knew exactly what was needed.  Add on the time taken ordering and collecting stuff and that's probably another hour or so.  That time has to be paid for somehow, so if someone is on a day rate it seems perfectly reasonable for them to add a bit on to the materials price to cover all the time taken to order and get the stuff.

[redtop]

I agree absolutely with the last 2 posts, the time and effort in getting material costs is significant, and fitting other peoples stuff is often a nightmare.  Even if it fits it can be crap quality and make a good job bad. We do quotes all the time and have to show a handling fee on top of product costs.  Or work out the overheads in negotiating supplies and add it into the day rate.

 

Saying something cost X and it actually cost Y is a lie and doesn't do the industry any favours

[Oz07]

3 hours ago, redtop said:

yep very common practice, and also wrong and probably illegal (well it should be if it isn't).  I would expect a builder to negotiate better prices than I can; that's fine but getting a product price of £1 and then telling me its costing £1.50 is fraud.  tell me its a quid and then charge more for labour. and if that makes the labour look expensive that's another matter but this practice of lying about the cost of materials is shocking.

Ok Jeremy corbyn 

[Temp]

4 hours ago, PeterW said:

Its not illegal for good reason 

 

It's not illegal to add a 20% markup but it would be to add 20% and say it's VAT  when it isn't. 

[PeterW]

2 minutes ago, Temp said:

 

It's not illegal to add a 20% markup but it would be to add 20% and say it's VAT  when it isn't. 

 

Yep entirely agree with that !

[redtop]

well I guess I am in the minority; of one ?  but when our groundworker sent me his quote, first thing I did was check price of materials. and they were spot on and he even provided the material receipts when the job was done.  No markup at all. I did pay what I felt was a fair days wage (I didn't 'barter' it was his standard rate). surely that's good open honest trading.  Our timber guy is doing exactly the same.  And yes I pay for their time to get the materials ordered, etc, but that's fine.

 

Jus seems like good business to me; adding on 20% to cost of materials and lying to the customer by saying that's the price paid don't seem right