Trade discount for builder and VAT Reclaim

[IanB]

I'm trying to understand the relationship between getting a decent trade discount and then VAT reclaim on invoices in my name.

 

Is it sensible to open a bank account with dual card access for myself and my builder/Project manager (whom I completely trust). My thought process is he can use his trade account to purchase with a discount but ask for VAT receipts to be made out to my name and address to ensure VAT reclaim. That way I keep a handle of current cash balance and outgoing from my account. Is this allowed and best practice

 

Thanks

 

 

[JohnMo]

5 hours ago, IanB said:

Is it sensible to open a bank account with dual card access for myself and my builder/Project manager

No.

 

5 hours ago, IanB said:

My thought process is he can use his trade account to purchase with a discount but ask for VAT receipts to be made out to my name and address to ensure VAT reclaim

Except the builder shouldn't be charging you vat anyway, if he is installing the parts he buys. His service to you should be free of VAT.for goods and service.

 

Trust us nothing to do with the subject.

[saveasteading]

10 minutes ago, JohnMo said:

the builder shouldn't be charging you vat anyway

5% on a conversion.  One big advantage of that is that the builder can own or hire equipment and it falls within he one invoice. VAT reclaims do not otherwise allow tool hire or purchase.

 

But otherwise...NO. There is nothing to stop you buying materials, and the only downsides might be if you get it late, or if there is a problem with quantities/ waste.

[IanB]

I appreciate most materials are VAT free but, correct me if I'm wrong, all purchases incur VAT from the trade/wholesaler which the supplier would normally reclaim back assuming they are VAT registered. When they do a supply and fit it "could" be an opportunity to add an extra tickle to the costs. I am trying to, where possible, purchase as much as possible myself with a trade discount as part of self build, having invoice made out in my name & address and then reclaim at the end of project

[Alan Ambrose]

Don't know whether you got @saveasteading 's point: If you hire in machines, hire surveyors or other 'knowledge workers', buy tools etc then you can't claim back the VAT - these are examples of things that are not on the self-build VAT-reclaim list. If a trade does this for you in the course of doing some work involving labour then they can claim back the VAT but their supply will still be zero-rated to you. That is, you've saved the VAT over buying directly.

 

The other factor though I think is this - it takes a fair amount of time and effort to hunt for good prices / compare products etc. Most trades won't bother knowing they're just going to bill straight through anyway. You have a much bigger incentive to keep your own bill down.

[IanB]

I understand. Thanks for all the replies

[saveasteading]

@Alan Ambrose points are excellent. Most builders have one trade account because of convenience and that a decent turnover gets good service. 

That might well not be the best for price.

I happen to be very happy that our chosen merchant always gives the best or near best value without ever haggling.

All we buy elsewhere is specialist stuff or pallets of eg screed where the middle merchant is missed out. That can save 10%.

On 04/08/2026 at 16:06, saveasteading said:

the only downsides

I forgot a big one. Cashflow. You will be paying 20% vat and not get it back until your claim at the end. Materials are typically 40% of a job.

The contractor reclaims vat every 3 months so also has cashflow and admin issues. They are entitled to more than what you call a "tickle". I'd want 20% on top. 

So our decision us that we are buying materials , having long experience of best value. 

But the plasterboarders are supplying their own, as this reduces handling, waste, (and skips). Ditto electrician and plumber for their tech stuff but we buy the appliances.

[Temp]

On 05/08/2026 at 09:38, IanB said:

I appreciate most materials are VAT free but, correct me if I'm wrong, all purchases incur VAT from the trade/wholesaler which the supplier would normally reclaim back assuming they are VAT registered. When they do a supply and fit it "could" be an opportunity to add an extra tickle to the costs. I am trying to, where possible, purchase as much as possible myself with a trade discount as part of self build, having invoice made out in my name & address and then reclaim at the end of project

 

Some of this is down to the supplier. Will they give your PM his normal discount if the order isn't going through his account? If it is going through his account then you will probably have issues with the reclaim.

 

Chances are we are only talking about a few builders merchants. Why not ask your PM if he can help you get an account at the BM, possibly with a similar discount ?

 

[saveasteading]

50 minutes ago, Temp said:

account at the BM,

If your project is big enough then you will get an account, subject to credit checks or paying as you go.

They may say trade only, but just ask for the manager or sales rep.