Made agreement with Builder but changed my mind

comeandgo

Are you sure your first builder means actual cash and not that he does not take credit cards?    That amount paid in cash causes a lot of problems for you, in fact the bank will be quizzing you as to why you are withdrawing so much and will give your builder problems trying to use it if he is not putting it 8nto a bank.  His suppliers will not accept cash. 

 But you are wanting out of a contract you agreed to.  If you use the excuse I’m not paying in cash then he can say a cheque will do so you are back to square one.  

nofoollikeold

The VAT threshold is £85,000 of turnover, not profit.  If your job is £92.5K then, if it is completed within a year, the builder MUST register for VAT.  You need to be very careful that he / she does not register and then charge VAT on top of the estimate / quotation - that's another £18.5 K

kazwookie

If it £90K + in cash, good luck with drawing that amount out of the bank!

Don't do it, IMO for what it is worth, far too much mo ney to be handing over, BEFORE any work is done, if it is cash, do it in paid / work stages you both agree, x amount of work = x amount of cash

macman

Section62 said:

Auti said:

He requested cash after you agreed ? In my view he then changed the terms of the agreement and to something that could be seen as illegal. Have you the request for cash in writing/email? I would say to him that you could not continue due to the cash request and legalities of it.

There's nothing illegal about asking to be paid in cash, or for cash payments to be made.

The legalities relate to whether the builder will account for the cash correctly, e.g. declaring it for tax and (if appropriate) being registered for VAT and correctly administering VAT payments.

If the OP uses the cash request as an excuse to pull out, what happens if the builder responds that it is Ok to pay by bank transfer instead?  Better to be honest and say a more competitive price has been offered by someone else.

Spot on. Cash is legal tender, and there is nothing in the contract to say that the consideration must be paid by cheque or bank transfer.
But the legality (or otherwise) of the builder's tax returns are not relevant: whether he declares it or not does not affect the potential validity of the contract.
My take on this is that someone who takes on an £85K job without a proper schedule of works and detailed contract is unlikely to pursue any legal remedy for alleged breach of contract.. For starters, there was apparently not even any  agreement as to start date.

Doozergirl

macman said:

Section62 said:

Auti said:

He requested cash after you agreed ? In my view he then changed the terms of the agreement and to something that could be seen as illegal. Have you the request for cash in writing/email? I would say to him that you could not continue due to the cash request and legalities of it.

There's nothing illegal about asking to be paid in cash, or for cash payments to be made.

The legalities relate to whether the builder will account for the cash correctly, e.g. declaring it for tax and (if appropriate) being registered for VAT and correctly administering VAT payments.

If the OP uses the cash request as an excuse to pull out, what happens if the builder responds that it is Ok to pay by bank transfer instead?  Better to be honest and say a more competitive price has been offered by someone else.

Spot on. Cash is legal tender, and there is nothing in the contract to say that the consideration must be paid by cheque or bank transfer.
But the legality (or otherwise) of the builder's tax returns are not relevant: whether he declares it or not does not affect the potential validity of the contract.
My take on this is that someone who takes on an £85K job without a proper schedule of works and detailed contract is unlikely to pursue any legal remedy for alleged breach of contract.. For starters, there was apparently not even any  agreement as to start date.

There are laws surrounding VAT invoices though.  It has to be detailed correctly, with their VAT number, address etc.  

Anyway, no one has mentioned the 14 day cooling off period you would also have under the law.  When did you agree this, OP?  

powerful_Rogue

Doozergirl said:

macman said:

Section62 said:

Auti said:

He requested cash after you agreed ? In my view he then changed the terms of the agreement and to something that could be seen as illegal. Have you the request for cash in writing/email? I would say to him that you could not continue due to the cash request and legalities of it.

There's nothing illegal about asking to be paid in cash, or for cash payments to be made.

The legalities relate to whether the builder will account for the cash correctly, e.g. declaring it for tax and (if appropriate) being registered for VAT and correctly administering VAT payments.

If the OP uses the cash request as an excuse to pull out, what happens if the builder responds that it is Ok to pay by bank transfer instead?  Better to be honest and say a more competitive price has been offered by someone else.

Spot on. Cash is legal tender, and there is nothing in the contract to say that the consideration must be paid by cheque or bank transfer.
But the legality (or otherwise) of the builder's tax returns are not relevant: whether he declares it or not does not affect the potential validity of the contract.
My take on this is that someone who takes on an £85K job without a proper schedule of works and detailed contract is unlikely to pursue any legal remedy for alleged breach of contract.. For starters, there was apparently not even any  agreement as to start date.

There are laws surrounding VAT invoices though.  It has to be detailed correctly, with their VAT number, address etc.  

Anyway, no one has mentioned the 14 day cooling off period you would also have under the law.  When did you agree this, OP?  

Depends when the OP sent the email agreement. If this was when the builder was still at the premises, or immediately after, then yes they have the cooling off period. If the email was sent shortly after the builder left, then there is no 14 day cooling off period.

Doozergirl

powerful_Rogue said:

Doozergirl said:

macman said:

Section62 said:

Auti said:

He requested cash after you agreed ? In my view he then changed the terms of the agreement and to something that could be seen as illegal. Have you the request for cash in writing/email? I would say to him that you could not continue due to the cash request and legalities of it.

There's nothing illegal about asking to be paid in cash, or for cash payments to be made.

The legalities relate to whether the builder will account for the cash correctly, e.g. declaring it for tax and (if appropriate) being registered for VAT and correctly administering VAT payments.

If the OP uses the cash request as an excuse to pull out, what happens if the builder responds that it is Ok to pay by bank transfer instead?  Better to be honest and say a more competitive price has been offered by someone else.

Spot on. Cash is legal tender, and there is nothing in the contract to say that the consideration must be paid by cheque or bank transfer.
But the legality (or otherwise) of the builder's tax returns are not relevant: whether he declares it or not does not affect the potential validity of the contract.
My take on this is that someone who takes on an £85K job without a proper schedule of works and detailed contract is unlikely to pursue any legal remedy for alleged breach of contract.. For starters, there was apparently not even any  agreement as to start date.

There are laws surrounding VAT invoices though.  It has to be detailed correctly, with their VAT number, address etc.  

Anyway, no one has mentioned the 14 day cooling off period you would also have under the law.  When did you agree this, OP?  

Depends when the OP sent the email agreement. If this was when the builder was still at the premises, or immediately after, then yes they have the cooling off period. If the email was sent shortly after the builder left, then there is no 14 day cooling off period.

I don't think that's correct. 

https://www.citizensadvice.org.uk/consumer/changed-your-mind/cancelling-a-service-youve-arranged/

the_lunatic_is_in_my_head

nofoollikeold said:

The VAT threshold is £85,000 of turnover, not profit.  If your job is £92.5K then, if it is completed within a year, the builder MUST register for VAT.  You need to be very careful that he / she does not register and then charge VAT on top of the estimate / quotation - that's another £18.5 K

Traders must provide the consumer with the total price inclusive of taxes and traders must also register for VAT when they expect to go over the threshold. 

A builder who doesn't need to be registered that is taking on a job over the threshold that they expect to complete within a rolling 12 month period should add 20% to their total price (although probably at this point shouldn't detail it as VAT).

If the quote is accepted and work begins they should register as they would at this point expect the contract to be completed and payment made.

The requirement to give the total price inclusive of taxes applies to all contract types and without the required information the consumer isn't bound by the contract.

Equally any changes to the initial terms must be expressly agreed by the trader and the consumer, a consumer obviously isn't going to agree to a 20% increase when they don't have to.

IIRC when registering for VAT the trader can reclaim the previous 6 months worth of VAT on outputs (assuming they aren't on a flat rate scheme, again IIRC). The trader would still be liable to pay the VAT on the amount the consumer pays them, it wouldn't be a case that 90k has been taken and the builder needs to find another 18k on top, it would be that the trader has taken 90k and needs to suffer around 15k in VAT. 

the_lunatic_is_in_my_head

Doozergirl said:

macman said:

Section62 said:

Auti said:

He requested cash after you agreed ? In my view he then changed the terms of the agreement and to something that could be seen as illegal. Have you the request for cash in writing/email? I would say to him that you could not continue due to the cash request and legalities of it.

There's nothing illegal about asking to be paid in cash, or for cash payments to be made.

The legalities relate to whether the builder will account for the cash correctly, e.g. declaring it for tax and (if appropriate) being registered for VAT and correctly administering VAT payments.

If the OP uses the cash request as an excuse to pull out, what happens if the builder responds that it is Ok to pay by bank transfer instead?  Better to be honest and say a more competitive price has been offered by someone else.

Spot on. Cash is legal tender, and there is nothing in the contract to say that the consideration must be paid by cheque or bank transfer.
But the legality (or otherwise) of the builder's tax returns are not relevant: whether he declares it or not does not affect the potential validity of the contract.
My take on this is that someone who takes on an £85K job without a proper schedule of works and detailed contract is unlikely to pursue any legal remedy for alleged breach of contract.. For starters, there was apparently not even any  agreement as to start date.

There are laws surrounding VAT invoices though.  It has to be detailed correctly, with their VAT number, address etc.  

Anyway, no one has mentioned the 14 day cooling off period you would also have under the law.  When did you agree this, OP?  

If a trader visits a person's home and either leaves them a quote to consider or sends one later this is classed as on-premises with no right to cancel. 

If the trader visits the consumer's home and a contract is agreed there and then, or immediately after the trader leaves, then this is classed as off premises which comes with the right to cancel and different regulations covering information requirements  

the_lunatic_is_in_my_head

@akorn77 This was recently discussed on the Consumer Rights board:

https://forums.moneysavingexpert.com/discussion/6378840/canceling-building-work/p1

In an instance where you don't have a right to cancel and you decide not to go ahead the view is that the contract has been breached due to fault on your part.

Basic contract law applies in that the trader may claim either their costs so far or their loss of profit.

Any costs must be mitigated and there is no entitlement to loss of profits that could be replaced by for example finding another customer.

As the trader told you they have other customers lined up I don't see they have a claim for loss of profits.

As far as costs go I don't see the trader has a claim for anything that they would have suffered were you to decline their quote, things such as visiting your home and pricing the job are not losses due to the breach of contract but normal business expenses in sourcing custom. 

Obviously no labour has occurred and I assume the job doesn't start tomorrow so it's unlikely any materials have been ordered. Had any been ordered then generic items could likely be used on another job, even if there were specialist items that the trader couldn't cancel or return you could at worst pay for them upon receipt and ask the other builder to knock them off their quote.

You are under no obligation to justify your reasoning for breaching the contract, simply advise the trader you don't wish to go ahead and see what their response is. 

If they ask for a couple of hundred to cover "admin" for doing any work in preparing for the job then I would probably pay this. If they can demonstrate any specific costs and supply proof I would also pay for this.