House Extension - Builder Questions...

[John Smith Esq.]

Hi all,

I'm getting my house extended and now have planning permission. I know a guy who is experienced, competent and trustworthy who has given me a good quote for doing the build. He is in his 50s, a good brick layer and all rounder. He isn't VAT registered, in fact he isn't even a registered company. He gets a lot of work these days working with other people. Anyway, I just want to check- does it matter that he isn't a company? There aren't going to be any formal letters or receipts on headed paper. Any guarantee will be a promise from him to me.

Just to be clear - we will be getting the necessary building certificate and all the inspections will happen throughout. Electrics, windows and plumbing will be by relevant professionals. He will be doing the foundations, bricklaying, roof, plastering and joinery. The manner of payment would be as I'd expect - I won't pay anything until it reaches DPC and then in instalments from there.

Are there any issues with this that I'm missing? Future conveyancing issues or concerns with using a guy who is a builder but not registered as such?

Bearing in mind what a lot of con artist companies are around and what the reputable ones are charging, I'd really like to have him do a good job for a good price. Also, the whole build will be buy him, no random contractors.

Appreciate any thoughts.

 

[^woody^]

No issues at all.

 

[John Smith Esq.]

Thanks Woody!

 

[Murdochcat]

Well, how much do you expect to pay him in total?

 

[John Smith Esq.]

£50K

 

[Murdochcat]

£50K

Over how long?

 

[stuart45]

I've done jobs for people in that way for years. Nowadays I only work on an hourly rate, but everyone I've worked for has been happy.
If he's a good tradesman you have probably got a decent deal.

 

[John Smith Esq.]

Over how long?

12 weeks ish. Why?

 

[nickjb]

He needs to turn over less than £90k in a 12 month period to stay under the vat threshold. If he's getting £50k in 12 weeks then I'd be surprised he can manage that if he has a lot of other work throughout the year.

Maybe some creative accounting going on. Doesn't really effect you I suppose if the work is ok and you get all the paperwork

 

[noseall]

He needs to turn over less than £90k in a 12 month period to stay under the vat threshold. If he's getting £50k in 12 weeks then I'd be surprised he can manage that if he has a lot of other work throughout the year.

Maybe some creative accounting going on. Doesn't really effect you I suppose if the work is ok and you get all the paperwork

£50k may be the value of the contract. It doesn't mean it's all handed over to the builder. It's up to the builder and the customer how things are paid for and no need for any creative accounting either.

 

[John Smith Esq.]

50K will include electrician and plumber. Possibly windows. Those are being done by other people. He might take a bit longer than 12 weeks since he is doing the rest on his own. Maybe he gets paid in cash at times on other jobs, I don't know. As long as it doesn't affect me I don't care.

What paper work do I need from him, just receipts for materials bought and what I've handed over to him? Most likely it'll be a hand written piece of paper.

 

[Murdochcat]

In the ideal world proper invoices

 

[stuart45]

It depends on how your payment structure is worked out. For example, are you paying for the materials, and then paying for his labour separately? If so, then you'd want the material reciepts. If he's priced for labour and materials, then he'll keep the receipts himself, and just invoice you. He'll need the material receipts for his tax accounts.

 

[aveatry]

Maybe he keeps his turnover under the VAT limit. And the fact that he is NOT a LTD may be better for you than is he was as a sole trader he cannot fold / go out of business with your money.

 

[noseall]

What paper work do I need from him, just receipts for materials bought and what I've handed over to him? Most likely it'll be a hand written piece of paper.

If he has priced in the materials as well as labour, then all he should do is invoice you. If he asks you to personally settle any items that are within is contract, then you should receive theses invoices an the amounts logged and deducted from his contract price.

A lot of builders rely on stage payments. I just bill at the end of the month. On a small extension, that means the roof can be on. Regardless, before you hand over any money, you should have value. That could be materials on site as well as work completed and passed by Building Control.