Customer demanding receipts

Doozergirl

Bourneo here we come!  

macman

Why is it wrong for the contractor to buy at wholesale/trade prices and add a margin to the customer? That's no different to what every single retailer does.
There is no 'surprise' element here: the customer had a quote before the work started and knew what they were going to pay. And then agreed the contract.
The additional info that the customer expects the contractor to continue rendering the walls in below-freezing conditions just reinforces the view that they are completely clueless and ignorant.
I would attempt to recover the debt and then walk away, let her find someone else to complete the work if she can.

elsien

Gavin83 said:

Doozergirl said:

DullGreyGuy said:

Doozergirl said:
As a sole trader, you should invoice for labour and materials separately because they are treated differently for income tax. 

Is this some weird building trade thing? How are materials treated differently for income tax @doozergirl? 

Normally for any goods or services you take the price you've charged your customer and minus the costs you've incurred, there isnt a lower rate of income tax for any profit margin you've added to the materials -v- services.

Things are slightly different if you arent doing cash accounting and you're holding stock but not sure how many sole trader builders have a few pallets of board at home ready for the next potential customer. 

It is a weird building trade thing.  Construction Industry Scheme.  If you subcontract you split them out and whoever employs you holds back 20% of the labour charge for His Maj.  

If they are used to that they will split labour and materials as habit.    

I too don’t get this. If you’re adding extra costs onto the materials you buy why is that not considered profit and therefore charged at the same rate at labour costs? If you can do that why charge labour at all? You might as well just charge a fee for the materials and make the labour free.

Postik said:

The customer should have purchased the materials themselves if they wanted receipts for them.  If your husband charged x4 times the amount and "syphoned" off the extra that's his business.  It's called making a profit.  It's also his perogative to earn as much as he possibly can, and the customer's perogative to do their due dilligance (before the job starts, not half way through) and get the best deal for themselves.

In all honesty I think it’s a disgusting tactic. 

Firstly I’ve no issue with people being paid for their time. If they’re spending X hours sourcing/picking up products then they should of course be financially rewarded for this. However the customer isn’t the expert, hence the reason they’re hiring the tradesperson in the first place. Charging them way over the odds for products they know full well the customer knows nothing about is merely taking advantage.

If a builder said to me “You’ve got 10 square meters of wall to tile, I’ll grab you some nice tiles for that, it’ll be £1000” then I’d expect to have tiles approaching that value. If they then turned up with £10sqm tiles from B&Q and then tried to tell me the rest was their profit I’d be fuming and rightly so. If you’re buying materials for a customer it’s definitely implied the materials will roughly match the price you’re paying. People on here say you should question it first but I can guarantee you if you presented your builder with pages of questions and a request to list every item they’re buying and the price they’d tell you to do one, precisely because they can’t then rip you off.

Whereas if I wanted particular tiles or a bathroom suite (for example) I’d buy them myself to get the value I wanted. 

Ok, it’s different for bricks and mortar etc but you do expect the tradesperson to add a bit on. That’s why you get proper quotes and compare them. 

Section62

elsien said:

Gavin83 said:

...If they then turned up with £10sqm tiles from B&Q and then tried to tell me the rest was their profit I’d be fuming and rightly so. If you’re buying materials for a customer it’s definitely implied the materials will roughly match the price you’re paying....

Whereas if I wanted particular tiles or a bathroom suite (for example) I’d buy them myself to get the value I wanted. 

Ok, it’s different for bricks and mortar etc but you do expect the tradesperson to add a bit on. That’s why you get proper quotes and compare them. 

You'd also be taking on the liability if it turns out the materials are defective or not as durable as expected.

Which is a key point when it comes to talking about the markup a builder might add to the materials they buy.  It isn't pure 'profit' they are making.  The markup allows for the admin involved in purchasing, and also the liability (and/or 'hassle') if there is a problem with what has been purchased.

Someone devolving the task of material purchases to the builder also needs to understand the potential costs aren't limited to providing replacement materials if the first lot fail - the builder will also have labour and waste disposal costs to suck up, in addition to the replacement materials.

I don't know anyone who implies that what they charge for materials is the same as what they pay for them.

Doozergirl

elsien said:

Gavin83 said:

Doozergirl said:

DullGreyGuy said:

Doozergirl said:
As a sole trader, you should invoice for labour and materials separately because they are treated differently for income tax. 

Is this some weird building trade thing? How are materials treated differently for income tax @doozergirl? 

Normally for any goods or services you take the price you've charged your customer and minus the costs you've incurred, there isnt a lower rate of income tax for any profit margin you've added to the materials -v- services.

Things are slightly different if you arent doing cash accounting and you're holding stock but not sure how many sole trader builders have a few pallets of board at home ready for the next potential customer. 

It is a weird building trade thing.  Construction Industry Scheme.  If you subcontract you split them out and whoever employs you holds back 20% of the labour charge for His Maj.  

If they are used to that they will split labour and materials as habit.    

I too don’t get this. If you’re adding extra costs onto the materials you buy why is that not considered profit and therefore charged at the same rate at labour costs? If you can do that why charge labour at all? You might as well just charge a fee for the materials and make the labour free.

Postik said:

The customer should have purchased the materials themselves if they wanted receipts for them.  If your husband charged x4 times the amount and "syphoned" off the extra that's his business.  It's called making a profit.  It's also his perogative to earn as much as he possibly can, and the customer's perogative to do their due dilligance (before the job starts, not half way through) and get the best deal for themselves.

In all honesty I think it’s a disgusting tactic. 

Firstly I’ve no issue with people being paid for their time. If they’re spending X hours sourcing/picking up products then they should of course be financially rewarded for this. However the customer isn’t the expert, hence the reason they’re hiring the tradesperson in the first place. Charging them way over the odds for products they know full well the customer knows nothing about is merely taking advantage.

If a builder said to me “You’ve got 10 square meters of wall to tile, I’ll grab you some nice tiles for that, it’ll be £1000” then I’d expect to have tiles approaching that value. If they then turned up with £10sqm tiles from B&Q and then tried to tell me the rest was their profit I’d be fuming and rightly so. If you’re buying materials for a customer it’s definitely implied the materials will roughly match the price you’re paying. People on here say you should question it first but I can guarantee you if you presented your builder with pages of questions and a request to list every item they’re buying and the price they’d tell you to do one, precisely because they can’t then rip you off.

Whereas if I wanted particular tiles or a bathroom suite (for example) I’d buy them myself to get the value I wanted. 

Ok, it’s different for bricks and mortar etc but you do expect the tradesperson to add a bit on. That’s why you get proper quotes and compare them. 

There's a guarantee that goes with supply & fit as well.  

Buy your own and you get the grey line of responsibility that falls mainly to you if something breaks or fails.  You end up paying for labour again. 

That's fine, it's your own risk, but when it belongs to your tradesperson it has to be paid for but the cost is spread across more than one job. Like an insurance policy.  

ThisIsWeird

Hi Liberty L.

I suspect that most tradesfolk would simply reply, "Do you want me to continue with the work on the agreed terms, or not? If not, you will be terminating our contract, and you can find another builder. I will, of course, be invoicing you for all outstanding payments."

Some would say effectively the same, but in just 5 words. One of which would be quite rude.

The situation is made more tricky by your hubby being in a delicate state, but I think the same applies. I suspect he'd like to get on and finish the job? But it's just too unpleasant under the current circumstances. I think putting the situation down as succinctly as possible, in good ol' B&W, can often focus people's minds. Cut to the chase - the situation is 'like this', and 'what are you going to decide'?

Perhaps something like:

"Dear Ms Whatsit.

On the xth, I provided you with a quote for building work (Quote number X). This indicated one price for all the materials, and one for labour. You accepted this quote, and I am currently approximately Xth of the way through the agreed work.

You initially paid all the requested instalments on time – thank you – but this situation changed on the Yth when you, unprompted, withheld a payment and requested detailed invoices for the materials. During the subsequent discussions, your behaviour towards me became aggressive, with your partner attempting to intervene to calm you down at one point. I fear, therefore, that our working relationship has reached the stage where trust between us has been lost, and the building contract between us made untenable.

I need to make it clear that I consider your demands and behaviour towards me to be unreasonable and completely unacceptable, and I will have no option but to terminate our contract if this continues. In addition, I will take action against you to recover all outstanding payments.

I do not state the above lightly; I do wish to continue with the agreed works, and on the agreed terms; I have yet to fail to complete a project for a customer, and it is important to me that my reputation as a competent and trusted builder remains unquestionable.

Please let me know how you wish to proceed."

The choice is then hers. She either calms down, accepts the original terms and asks you to continue, or she doesn't. For the latter, they will be shown to have made demands that have led to the contract being broken. And you can demonstrate that you have been very reasonable, and have made attempts to continue the agreed work, on the agreed terms.

Your hubby can hold his head high, and hopefully continue the work with magnanimity. And no more BS from them.

greenface2

I use a local plastic supplier EUROCELL . Anyone can walk in off the street and buy anything I can buy from them . Its not just set aside for trade . Because of the high amount of spending I have with them, I am offered a discount of currently 30% most products but mainly all the products that I need . I could pass that onto my customers but choose not to , They could get it themselves with all the faff . Your hubby doesn't need to show receipts for anything as the quote was accepted as materials and labour . He should be happy and honest to say ive added some on for myself . Its down to him if its the wrong item ordered . would they pay if it wasn't . Good luck to your hubs and remind him there are knobs in this world but the nice people keep them hidden 

GDB2222

I don’t think it’s a good idea to split material and labour in the quote. It annoys me, as a customer, if I see a massive mark up on the materials.

As an example, I didn’t take up a quote for some heating work, because the materials were clearly marked up 100%. 20% I’d have accepted. 50% okay. But 100% got my goat. 

I am not saying that I am right or wrong, by the way. But, I’d rather see the labour charge at a higher hourly figure, than see part of the labour hidden in what I regard as an excessive margin on the parts.

Risteard

Gavin83 said:

Is there any reason he can’t supply the receipts? Regardless of who’s right or wrong this surely would have prevented a lot of the later fallout.

I would advise against ever doing this. These are none of the customer's business and form no part of the contract.

Gavin83

GDB2222 said:

I don’t think it’s a good idea to split material and labour in the quote. It annoys me, as a customer, if I see a massive mark up on the materials.

As an example, I didn’t take up a quote for some heating work, because the materials were clearly marked up 100%. 20% I’d have accepted. 50% okay. But 100% got my goat. 

I am not saying that I am right or wrong, by the way. But, I’d rather see the labour charge at a higher hourly figure, than see part of the labour hidden in what I regard as an excessive margin on the parts.

Couldn't agree more. It's not about the final price, nor is it about not paying someone for the work they do. I'm certainly not someone who would shy away from paying but nothing annoys me more than feeling like I've been ripped off or taken for a mug. Someone massively marking up materials would certainly fit into the rip off category for me.

Were I to spot this before the work started I'd find someone else to do the work. Were I to spot it after I'd likely pay the invoice but I certainly wouldn't use them again nor recommend them to anyone else.

I would also like to see a higher labour charge and the materials to be charged at the correct price even if the end price I pay remained the same. It's not actually about the final cost at all, it's the principle of the matter. I'd even be happy if they listed a 'materials gathering fee' or something similar as a separate item on the invoice. It's essentially about transparency and if I felt they were being sneaky and trying to hide costs I wouldn't wish to use them.

Risteard said:

Gavin83 said:

Is there any reason he can’t supply the receipts? Regardless of who’s right or wrong this surely would have prevented a lot of the later fallout.

I would advise against ever doing this. These are none of the customer's business and form no part of the contract.

Then don't supply them and instead get into issues such as the OP is describing. Why not supply them unless you're concerned the contents of the receipts will cause more problems than they'll solve.