Architect Fees Query - Help!

ugenmzs

Hello,

I am looking for some guidance regarding how my Architect is working out his fee.

Basically my concern is that he is basing his % fee on the build construction costs inclusive of VAT. Thus we will effectively be paying vat on vat as his professional fee will include vat.

I would have thought that his % fee would be on the net build costs - excluding vat. I would like to clarify this before I ask the question to them directly, so any advice / comments would be very much appreciated.

thanks

System

I would have thought percentage fees are based on the costs excluding vat - as if you are building a new house you will be claiming the vat back, so effectively not paying it!?
Charging percentage fees is pretty old school too, i would ask for a quote detailling the fee (i.e. hourly rates/hours per stage) - can i ask what the size of job is and what the percentage is?

iamcornholio

If your Architect is a proper Architect (ie RIBA, or ARB) then he should be working under their standard Conditions of Appointment, and this states that fees are based on the ex-VAT build costs

Even if he is not a proper Architect, then unless your agreement states otherwise, then it would be fair to assume that the ex-VAT costs are used

keystone

ugenmzs wrote: »

Basically my concern is that he is basing his % fee on the build construction costs inclusive of VAT.

Are you concerned because you know for definite that he is or because you think that he might be?

.....................as his professional fee will include vat.

Unless his turnover is less than £73k in which case he doesn't need to register for VAT and he won't be charging it.

Cheers

System

keystone wrote: »

Unless his turnover is less than £73k in which case he doesn't need to register for VAT and he won't be charging it.

Cheers

can still be vat registered turning over less than that

ugenmzs

it's an existing house that we are extending / loft converting, so I don't think we can reclaim any of the VAT - although please let me know if my assumption if not correct

iamcornholio: thanks for that, it does leave very little room for doubt. Do you happen to know where I can find the standard conditions for appointment?

The contract we signed was for a % and used the REBA work stages to break down the % due for each service - planning, building warrant etc... There contract does not however include a definition of build costs, not does it mention whether they are inclusive or exclusive of VAT.

I want to be fair to them, but equally I don't want to be ripped off. We have an ongoing dispute as they want the cost of paint / interior decor as well as the kitchen units included in the build price for their fee purposes - even though they will have no input in any of this and we will be using our own contractors (kitchen specialists etc) to do these additional works. Obviously I am happy for the plumbing and electricals for the kitchen to be included as they were part of the design drawings that they produced - but the units and decor were not. Meeting them today, should be an interesting conversation...

System

the standard form of appointment will only be applicabale if the contract you signed mentions it by name, if it was a standard appointment then you would normally sign a copy of that, it has everything outlined - for a copy you would have to pay, but if they have said this is what they are using then they should provide a copy of the terms for you.
Are they chartered architects, i.e. RIBA registered or are they ARB registered - i would still be asking for some hourly rates against the time they think it will take, also if it's a large office i would ask who will be working on it - they would have different rates for different staff

teneighty

Certainly if the fee charged is on a percentage basis it should be based on work costs exclusive of VAT as others have already said. For a small job like an extension and loft conversion it would be reasonable to ask for a fixed lump sum fee, but as you have already signed the contract it is probably a bit late for that.

The fee is usually based on the overall tender sum, assuming the architect is handling the tender process. So whatever is in the tender/specification is subject to the fee, be it painting or kitchen units. I am slightly confused by your comment about "using your own contractors" as surely they will all be "your own contractors" as the architect will not be employing tradesmen unless you have signed up for a design and build package?

keystone

the_r_sole wrote: »

can still be vat registered turning over less than that

Agreed but I did say "need".

Cheers