Extension Builder advice please

Jenferdog

Hi. We have recently moved into a bungalow which we chose with the specific intension of extending out the back. After struggling to get builders to come and give estimates because they are all so busy, we finally found two who we really liked and felt we would get on with. They both gave rough estimates pending plans drawn up. We were originally extending out across kitchen, bathroom and a bedroom by 1.5 meters out x 8 meters across. Builder 1 came in at 33k plus VAT, builder 2 was 20k without VAT (says there is no VAT). After plans drawn they were both given them and builder 1 has submitted a full quote which is the same as estimate. Builder 2 emailed an apology that quote was late after a couple of weeks, then nothing, no reply to my messages asking if all was ok either. Last night he sent an email apologising for lateness (personal issues now resolved) and the quote was 22.5 k (again n/a against VAT). Builder 1 seems very professional, had some great suggestions, showed us loads of photos of his work and I feel confident he will do a good job, also has great reviews on Check a Trade. Builder 2 seems confident he can do the job, we liked him and obviously liked his price but I can't find any reviews on his work and he only has a Facebook page with very little on, just 3 extensions none of which are the same as the one we want. We live in the North West, how do these quotes sound for price? There is such a big difference. And why do you think no VAT on the cheaper one? Builder 1 is coming round tomorrow to discuss final details as we have verbally accepted his quote because we thought builder 2 had decided he didn't want to do the work. Sorry for the rambling post but the late quote has thrown a spanner in the works for us. 

mailmannz

Everything about builder 2 says AVOID like the plague. Go with the professional builder who has clearly put time and effort in to the quote as well as investing time into talking to you about your build needs too.

Also, there absolutely is VAT payable. There is no escaping that unfortunately.

Teapot55

I can answer the bit about VAT.

A builder or contractor only has to charge their customers VAT if their ‘turnover’ (the builder’s turnover = the money they get in) is more than a certain amount every year (under tax rules). 

FreeBear

Teapot55 said:

I can answer the bit about VAT.

A builder or contractor only has to charge their customers VAT if their ‘turnover’ (the builder’s turnover = the money they get in) is more than a certain amount every year (under tax rules). 

The VAT threshold is £85,000 per year - Any decent builder will easily be above this doing a handful of extensions a year. If builder No.2 isn't doing enough work to warrant being VAT registered, you need to ask why. Is it a new business, in which case, does he have the experience & ability to do the work to a decent standard. Or is he just a crap chancer possibly engaged in tax fraud - If the latter, don't expect a guarantee or that the job will be finished.

Doozergirl

FreeBear said:

Teapot55 said:

I can answer the bit about VAT.

A builder or contractor only has to charge their customers VAT if their ‘turnover’ (the builder’s turnover = the money they get in) is more than a certain amount every year (under tax rules). 

The VAT threshold is £85,000 per year - Any decent builder will easily be above this doing a handful of extensions a year. If builder No.2 isn't doing enough work to warrant being VAT registered, you need to ask why. Is it a new business, in which case, does he have the experience & ability to do the work to a decent standard. Or is he just a crap chancer possibly engaged in tax fraud - If the latter, don't expect a guarantee or that the job will be finished.

All of this.    If you're not turning over £85k a year, you frankly should not be building extensions for people.   We all start somewhere, but you hit that threshold very quickly!  

VAT still applies on materials, it just isn't separated out by someone who isn't VAT registered.  In theory, the price difference for the same product should only be about 10%.   Don't make a presumption that someone not charging VAT should  be the same price as a VAT registered person charges before VAT.  


Just a point on the depth of your extension - why only 1.5m? 

Belenus

Is 1.5 meters out x 8 meters across correct?


£33,000 for a 12 sq. metre single story extension is £2,750 per sq. metre which may be above average. We paid a lot less than that for two extensions, albeit a few decades ago.

What does the work involve?

FreeBear

Just a thought... If this extension is being built as part of adaptations for a disabled or elderly person, some of the work may qualify for zero VAT relief. Not all the work, just some. For more information, a rather dull long read - https://www.gov.uk/guidance/reliefs-from-vat-for-disabled-and-older-people-notice-7017#building-and-construction

SootySweep1

Hi
We had an extension built a few years ago and our builder wasn't vat registered.
He was able to stay under the vat threshold because we paid the other trades separately.

Do both of them provide a clear breakdown for their quotes ? I'd be very wary if it's just an overall price.

Jen

GDB2222

Belenus said:

Is 1.5 meters out x 8 meters across correct?


£33,000 for a 12 sq. metre single story extension is £2,750 per sq. metre which may be above average. We paid a lot less than that for two extensions, albeit a few decades ago.

What does the work involve?

I am not a builder, but my understanding is that the cost per sq m is only a rough guide. 

The walls are an expensive component, and if this extension were double the depth it would increase the total wall length from 11m to 14m. Doubling the depth doubles the floor area, but it won’t double the cost of building the walls.  

Similarly, any RSJs where you knock through the back wall of the existing building are the same regardless of the depth of the extension.

Doozer asks the question why are you building only 1.5m deep. You might get a lot more space for not all that much more money if you went deeper. Obviously that depends on the site and your needs.

Doozergirl

SootySweep1 said:

Hi
We had an extension built a few years ago and our builder wasn't vat registered.
He was able to stay under the vat threshold because we paid the other trades separately.

Do both of them provide a clear breakdown for their quotes ? I'd be very wary if it's just an overall price.

Jen

Because you paid all the trades separately, you had individual contracts with those tradespeople.  If you had encountered problems, the person responsible would be the person you paid. 

Your 'builder' was just another subcontractor on site and had/s virtually no responsibility to you if any of *your* subcontractors messed up anywhere or if any of the materials you purchased were defective. 

Fine if you want to take the risk, but it is your risk.   It always works out dandy for someone who isn't responsible for much.  The only person responsible is you, ultimately.    You took the role and responsibilities of the builder in order to avoid VAT on the labour.  

Jenferdog

Thanks for the comments, good advice just what I needed. Doozergirl and GDB2222 - re the 1.5 meters, builder 1 pointed out that it would not be cost effective to have such a small extension and we are talking with him now to make it bigger. Ball park now for a bigger extension would be around 1.5 k per square meter. Builder 1 did give a full breakdown, builder 2 just the quote. Think I know which one we should go with.