Builder payment schedule

ComicGeek

DanDare999 said:

comeandgo said:

Risteard said:

ComicGeek said:

So 80% after only working half the time? No chance! A cynic would think it unlikely that they would do the 2nd week...

I've never paid a penny before work has been done - stage payments only for work completed.

Some trustworthy builders I know do charge a small deposit to reserve the time slot, but then only invoice stage payments after completing each part.

Deposits are completely normal and above board. Really everyone should expect to be paying a deposit in this day and age.

Do not agree at all regarding deposits.  A business should have profits from previous contracts to allow them to fund the next contract.  One of the criteria HMRC use to determine whether a business or employee is who carry’s the financial risk.  Being in business means things are a risk.    I have never had to, or been asked, to pay a deposit.  I use well connected businesses and the odd individual.

Why should they then provide interest free credit?

There's a big difference between asking for prompt payment upon completion of the work (can even be taken as credit card payment while still at the property), and providing 'interest free credit'.

comeandgo

DanDare999 said:

comeandgo said:

Risteard said:

ComicGeek said:

So 80% after only working half the time? No chance! A cynic would think it unlikely that they would do the 2nd week...

I've never paid a penny before work has been done - stage payments only for work completed.

Some trustworthy builders I know do charge a small deposit to reserve the time slot, but then only invoice stage payments after completing each part.

Deposits are completely normal and above board. Really everyone should expect to be paying a deposit in this day and age.

Do not agree at all regarding deposits.  A business should have profits from previous contracts to allow them to fund the next contract.  One of the criteria HMRC use to determine whether a business or employee is who carry’s the financial risk.  Being in business means things are a risk.    I have never had to, or been asked, to pay a deposit.  I use well connected businesses and the odd individual.

Why should they then provide interest free credit?

They don’t.  Payment is agreed at 30 days, they pay their suppliers at 60 days except sub contractors and wages are paid monthly.  

ComicGeek

DanDare999 said:

comeandgo said:

Risteard said:

ComicGeek said:

So 80% after only working half the time? No chance! A cynic would think it unlikely that they would do the 2nd week...

I've never paid a penny before work has been done - stage payments only for work completed.

Some trustworthy builders I know do charge a small deposit to reserve the time slot, but then only invoice stage payments after completing each part.

Deposits are completely normal and above board. Really everyone should expect to be paying a deposit in this day and age.

Do not agree at all regarding deposits.  A business should have profits from previous contracts to allow them to fund the next contract.  One of the criteria HMRC use to determine whether a business or employee is who carry’s the financial risk.  Being in business means things are a risk.    I have never had to, or been asked, to pay a deposit.  I use well connected businesses and the odd individual.

Why should they then provide interest free credit?

Actually, thinking that through more - paying a deposit is actually the consumer providing interest free credit to the tradesman. Why should they do this? There's enough posts on here about tradesman being paid deposits and never seen again.

It's different if there are bespoke materials being paid for ahead of time, but not for labour and standard costs.

Doozergirl

Rosa_Damascena said:

@Doozergirl - arbitrate please?

Did half of this thread disappear? 

I'm sure it looked different this morning.  

DRP

ak102 said:

Hi All,
would appreciate your views. This is the payment schedule I've been given by a builder, it seems quite a large % expected before work has started/ Day 1. The job is meant to take circa 2 weeks:

20% deposit to secure start date and time frame  

30% on day 1 

30% 7 days in to the project 

20% upon completion 

thanks

I have only ever paid in stages as each part of the work is completed and never up front. For small jobs I have always paid afterwards.

The only exception I can think of was for a fitted wardrobe where I paid up front for quite a large proportion , but that was because it was custom made to fit (and whole job in total was only 1k or so).

I would feel v uncomfortable paying such a large amount up front personally. 

Wanderfree

macman said:

Depends entirely what the job is. If the material costs are a higher proportion of the job than usual, and the total timescale is only 2 weeks (which would seem to indicate a lower labour proportion), and the materials need to be ordered and paid for upfront, then it may be perfectly reasonable.
So tell us what the project is.

Hi macman, the job is a bathroom reno and knock through

Risteard

comeandgo said:

DanDare999 said:

comeandgo said:

Risteard said:

ComicGeek said:

So 80% after only working half the time? No chance! A cynic would think it unlikely that they would do the 2nd week...

I've never paid a penny before work has been done - stage payments only for work completed.

Some trustworthy builders I know do charge a small deposit to reserve the time slot, but then only invoice stage payments after completing each part.

Deposits are completely normal and above board. Really everyone should expect to be paying a deposit in this day and age.

Do not agree at all regarding deposits.  A business should have profits from previous contracts to allow them to fund the next contract.  One of the criteria HMRC use to determine whether a business or employee is who carry’s the financial risk.  Being in business means things are a risk.    I have never had to, or been asked, to pay a deposit.  I use well connected businesses and the odd individual.

Why should they then provide interest free credit?

They don’t.  Payment is agreed at 30 days, they pay their suppliers at 60 days except sub contractors and wages are paid monthly.  

And what if they don't get paid on time/at all/in full?

ComicGeek

Risteard said:

comeandgo said:

DanDare999 said:

comeandgo said:

Risteard said:

ComicGeek said:

So 80% after only working half the time? No chance! A cynic would think it unlikely that they would do the 2nd week...

I've never paid a penny before work has been done - stage payments only for work completed.

Some trustworthy builders I know do charge a small deposit to reserve the time slot, but then only invoice stage payments after completing each part.

Deposits are completely normal and above board. Really everyone should expect to be paying a deposit in this day and age.

Do not agree at all regarding deposits.  A business should have profits from previous contracts to allow them to fund the next contract.  One of the criteria HMRC use to determine whether a business or employee is who carry’s the financial risk.  Being in business means things are a risk.    I have never had to, or been asked, to pay a deposit.  I use well connected businesses and the odd individual.

Why should they then provide interest free credit?

They don’t.  Payment is agreed at 30 days, they pay their suppliers at 60 days except sub contractors and wages are paid monthly.  

And what if they don't get paid on time/at all/in full?

Then they chase payment, send a letter before action and then take them to court. Taking a deposit doesn't prevent needing to do this, you still need to chase full payment.

macman

Wanderfree said:

macman said:

Depends entirely what the job is. If the material costs are a higher proportion of the job than usual, and the total timescale is only 2 weeks (which would seem to indicate a lower labour proportion), and the materials need to be ordered and paid for upfront, then it may be perfectly reasonable.
So tell us what the project is.

Hi macman, the job is a bathroom reno and knock through

So the materials, unless you are supplying them, are a large part of the total.

Risteard

ComicGeek said:

Risteard said:

comeandgo said:

DanDare999 said:

comeandgo said:

Risteard said:

ComicGeek said:

So 80% after only working half the time? No chance! A cynic would think it unlikely that they would do the 2nd week...

I've never paid a penny before work has been done - stage payments only for work completed.

Some trustworthy builders I know do charge a small deposit to reserve the time slot, but then only invoice stage payments after completing each part.

Deposits are completely normal and above board. Really everyone should expect to be paying a deposit in this day and age.

Do not agree at all regarding deposits.  A business should have profits from previous contracts to allow them to fund the next contract.  One of the criteria HMRC use to determine whether a business or employee is who carry’s the financial risk.  Being in business means things are a risk.    I have never had to, or been asked, to pay a deposit.  I use well connected businesses and the odd individual.

Why should they then provide interest free credit?

They don’t.  Payment is agreed at 30 days, they pay their suppliers at 60 days except sub contractors and wages are paid monthly.  

And what if they don't get paid on time/at all/in full?

Then they chase payment, send a letter before action and then take them to court. Taking a deposit doesn't prevent needing to do this, you still need to chase full payment.

Of course you still need to chase full payment, but it's about mitigating risks.