One builder quoting a lot less than the others

mademe

I've had 4 quotes for a loft conversion - all are around £70,000 before VAT. One builder, not VAT registered has quoted £50,000 which is obviously a lot more appealing but I obviously have a niggling feeling that this is too low, considering the other quotes. The loft would be a  conversion into one bedroom with a small dormer ensuite. 

1 of the higher priced builders could start earlier but the others would be next spring.

The lower priced builder can start before Christmas - they have a Checkatrade account with images of recent similar work plus 95% verified good reviews. There is one bad review but the builder has replied with a seemingly reasonable response. I'm not sure how easy it is get around the Checkatrade review verification process and if it is really that reliable?

I'm just a bit suspicious about why the price so low but also it's obviously an appealing saving if he is legitimate. Wondering whether to enquire further or just avoid?

swingaloo

The fact that he can start before Christmas would be the red flag for me. Good builders are usually very busy builders.

As for Checkatrade-   

A few years ago I rented a house off a builder, he had installed a conservatory which wasnt tied to the house properly and he had built a porch on the front. One night someone came to my door to collect something I had listed on Ebay. He remarked about a tree which had roots raised which was causing problems with the porch brickwork .  He said he hoped I wasnt offended but I was going to have problems very soon unless it was sorted.

I told him that I wasnt concerned as we were due to move out shortly and the work had been done by the guy who owned the house and that he was a builder. He just looked at me and said 'No, he's not love'. That just about summed the guy up. At the time of this visit we were also dealing with letters from  court regarding someone suing him for an atrocious kitchen fitting and had bailiffs chasing for money owed to another unhappy customer.  

He was a cowboy of the highest order-But his reviews on Checkatrade were glowing!

MeteredOut

If he's not VAT registered, then he's not doing many 50K jobs is he?

I'd not be the person to give him potentially his first big job where the risk is he spends your 50K, hasn't finished the job, and walks off site.

The only way I'd engage him would be payment at sign-off, perhaps with some materials paid for up front. Few builders would agree to that.

I'd also want to speak to previous customers no-matter who i picked. Don't trust checkatrade.

mademe

Thanks for your replies! Interestingly some of the other builders are not VAT registered so I'm assuming there is some kind of side business involving materials  - I'm not sure if this is legal but there seem to be quite a few local builders who don't charge VAT but do larger building works than our loft works. 

FreeBear

mademe said:

Thanks for your replies! Interestingly some of the other builders are not VAT registered so I'm assuming there is some kind of side business involving materials  - I'm not sure if this is legal but there seem to be quite a few local builders who don't charge VAT but do larger building works than our loft works. 

Round here, there is a guy that does all sorts of roofing & other building work. He has multiple companies, each doing "small jobs" so that each entity sneaks under the VAT threshold. All I see is an absolute nightmare when it comes to attributing liability should something go wrong... Then there are others that will get you to pay subcontractors & suppliers direct to avoid having the money appear on their books. Again, who do you go after if there is a problem...

MeteredOut

FreeBear said:

mademe said:

Thanks for your replies! Interestingly some of the other builders are not VAT registered so I'm assuming there is some kind of side business involving materials  - I'm not sure if this is legal but there seem to be quite a few local builders who don't charge VAT but do larger building works than our loft works. 

Round here, there is a guy that does all sorts of roofing & other building work. He has multiple companies, each doing "small jobs" so that each entity sneaks under the VAT threshold. All I see is an absolute nightmare when it comes to attributing liability should something go wrong... Then there are others that will get you to pay subcontractors & suppliers direct to avoid having the money appear on their books. Again, who do you go after if there is a problem...

Doing that could leave them open to accusations of tax avoidance, resulting in penalties.

https://www.thp.co.uk/running-two-businesses-for-vat/
https://www.heelanassociates.co.uk/splitting-business-avoid-registering-for-vat/

https://www.gov.uk/hmrc-internal-manuals/vat-single-entity-and-disaggregation-manual

Paying sub-contractors directly adds a big risk to customers should the builder walk off site before the job finishes or if there is a problem after they have completed the job.