Is it normal to pay some trades directly if they've been sub-contracted to do the job by the lead?

beckstar1975

We're getting a loft extension done and the company we're using have said that they'll contract the separate trades directly but we'll be expected to pay them so we don't have to pay VAT on that aspect of the build?

Big established company, is that normal? Not sure whether it's dodgy or not . .

Thanks

DullGreyGuy

Its not uncommon and done for VAT reasons as stated... similarly some will ask you to buy materials. It can either be to enable you to avoid paying VAT if the main contractor is registered but the subs arent or can be so the main contractor can avoid being VAT registered too by minimizing revenue.

Its not "dodgy" in the sense of illegal but does mean you have a contract with each party and so if something goes wrong you have to chase the appropriate party and you may find finger pointing between two or more of them. There is a cleaness, but possibly cost, to having a single contract with a single party so no matter what goes wrong you pursue them

beckstar1975

See thank you - I raised that with the guy from the main company and he assured me that would not be the case, anything that goes wrong would be dealt with under their main contract with us.

Glad to hear it's not too dodgy, my dad was a contracts manager/quantities surveyor for years on commercial developments, I may ask him to had to skim through too - but at least this is no reason to run away screaming at the first hurdle.

Really appreciate you taking time to reply

DullGreyGuy

beckstar1975 said:

See thank you - I raised that with the guy from the main company and he assured me that would not be the case, anything that goes wrong would be dealt with under their main contract with us.

Then you absolutely need to make sure that is baked into the contract as it isnt ordinarily how it would work... they may "assist you" but when push comes to shove their hand doesn't go in their pocket normally.

MikeJXE

beckstar1975 said:

See thank you - I raised that with the guy from the main company and he assured me that would not be the case, anything that goes wrong would be dealt with under their main contract with us.

Glad to hear it's not too dodgy, my dad was a contracts manager/quantities surveyor for years on commercial developments, I may ask him to had to skim through too - but at least this is no reason to run away screaming at the first hurdle.

Really appreciate you taking time to reply

I was a contracts manager too on housing projects. There is nothing wrong with the way you have been asked to pay. 

The company is probably using self employed sub contractors, they could be new and unvetted 

Do not leave them for long periods of time and then say. 

I didn't want it like that.

If you are not happy with the work quality the sooner you stop them the better

GlazingAdvice

I work in the glazing industry and it is not uncommon to pay a self employed contractor in the way you describe. It does however create a grey area - I questioned it on conservatories and didn't get a great answer at the company I was working for. Trust in the company and recommendations will play a part. 

pollypenny

We've had three kitchens fitted over the years and paid the plumber and electrician separately in each case. 

We used a reputable local kitchen firm who uses known, reliable contractors.