Contractor refusing to pay

smifferson

Hi all,

I recently did a day's work for a letting repairs company. Over the day I did 9 jobs varying from faulty toilets to filling cracks.

It was all going ok but until they started becoming quite quite prickly and rude down the phone out of the blue.

Long story short I was told to purchase materials and send them the receipts which I did. It was only £33 in total. On sending them the person said that I needed to change the name on the screwfix receipt to her company name so she could claim back the VAT. Obviously the company where I brought it from could not do this and said in theory that could be fraudulent. 

I explained that even if the name was changed, that I would be liable to pay tax on the £33 on top of my day rate as in theory it would appear as earnings and not materials. She then went off the handle telling me I need to understand the difference between labour only subcontractors and bona fide subcontractors which to be honest didn't make any sense to me.

Since then she said they withhold payments for a week to make sure there's no ongoing issues with the work. Which predictably she has stated there now is. I am a time served builder and am extremely confident that the minor repairs where completed to a high standard.

My questions are:

Does she have any right to change the name on the receipt for materials brought?

Can she withdraw payment without any proof or in theory do I have the right to put right the work? ( I severely doubt there are any issues) 

I get the impression that she does this regularly to get free labour as she mentioned that other tradesmen were got rid of for poor workmanship. 

It's only a days labour but I feel out a principle I would like to try and stop this company doing this to any other poor unsuspecting tradesman.

Any help and advice would be much appreciated! 

tacpot12

No she has no right to require the name on the receipt to be changed. If she wanted to buy them through her company, should should have made arrangements for your to use her account at a builders merchant.  

She told you to buy the materials, so that makes you a bona fide subcontractor according to her definition. She clearly doesn't understand that you can deduct expenses from your turnover so that you are not paying tax on the material costs.  

She has a contract to pay you if you do the work satisfactorily, and if the materials are of a satisfactory quality as you have supplied them. She can't not pay you, without you being able to take legal action to recover the money she owes, assuming you have some evidence of the contract.

I would suggest that you say it wasn't clear that she wanted to pay for the materials. Reminder her that you did pay for the materials and did the work to a high stanrard, so you need paying. Don't say any more. Just leave your expectation to be paid what you are owed hanging there. In all likelihood she will cough up. 

Next time, as her to put it in writing who is to buy and pay for the materials. Tell her you're prepared to get her a receipt with her name of it if she gives you the money beforehand. 

smifferson

tacpot12 said:

No she has no right to require the name on the receipt to be changed. If she wanted to buy them through her company, should should have made arrangements for your to use her account at a builders merchant.  

She told you to buy the materials, so that makes you a bona fide subcontractor according to her definition. She clearly doesn't understand that you can deduct expenses from your turnover so that you are not paying tax on the material costs.  

She has a contract to pay you if you do the work satisfactorily, and if the materials are of a satisfactory quality as you have supplied them. She can't not pay you, without you being able to take legal action to recover the money she owes, assuming you have some evidence of the contract.

I would suggest that you say it wasn't clear that she wanted to pay for the materials. Reminder her that you did pay for the materials and did the work to a high stanrard, so you need paying. Don't say any more. Just leave your expectation to be paid what you are owed hanging there. In all likelihood she will cough up. 

Next time, as her to put it in writing who is to buy and pay for the materials. Tell her you're prepared to get her a receipt with her name of it if she gives you the money beforehand. 

Thank you very much for the quick reply.

You are right she explicitly said I could buy materials and send her the receipts. 

In terms of claiming the work to be faulty, do I have a right to ask for evidence of this or a right to put right? I don't have a written contract as such but have emails and WhatsApps regarding the work requires and print screened the work schedule she sent me. Is this enough to be classed as a contract?

I have also got about 10 voice notes that she sent getting more and more aggressive claiming I don't know what I'm talking about.

Kim_13

She could have as tacpot12 said told you to buy the materials on her account and given you the means to do this, or asked you to buy in store given that there would then be no name on the receipt and it could go through the VAT. She could also have ordered for click and collect in the company name and given you the code to collect the materials. As she did none of these, you’ve followed her instructions and she cannot complain after the fact. She will have to take the hit for her mistake; it’s not reasonable to expect a contractor to be thinking about the tax position of a company that doesn’t even employ them!

If she wants to take it up with Screwfix after she’s paid you, that’s up to her - but she’ll get nowhere.

Are you VAT registered and could you invoice her company separately for the materials? £27.50 + £5.50 VAT for a total of £33, assuming all materials are standard rated.

smifferson

Kim_13 said:

She could have as others have said told you to buy the materials on her account and given you the means to do this, or asked you to buy in store given that there would then be no name on the receipt and it could go through the VAT. She could also have ordered for click and collect in the company name and given you the code to collect the materials. As she did none of these, you’ve followed her instructions and she cannot complain after the fact. She will have to take the hit for her mistake; it’s not reasonable to expect a contractor to be thinking about the tax position of a company that doesn’t even employ them!

Totally agree, thanks for your advice! It's funny as it's only £33 so only £6.60 saving for VAT. I suspect she is choosing to be abrasive about everything so that I back off and don't chase her for the money owed. Makes me sad as I'm a very honest person and believe in an honest days wage for a honest day's work. 

smifferson

'Are you VAT registered and could you invoice her company separately for the materials? £27.50 + £5.50 VAT for a total of £33, assuming all materials are standard rated.'

No I'm not VAT registered unfortunately. The more I think about it, the more I think this is just her way of trying to put me off trying to claim payment from her. She's been incredibly rude and seems to be trying to turn it towards me that I am being unreasonable. 

ThisIsWeird

Communicate from now on only via a recordable means - text or WhatsApp, for example, no phonecalls (unless you can record them). See if you can capture and evidence what she's asking of you. Ask her what, exactly, she wants you to do about the invoices. Give her enough rope.

Keep utterly calm and factual. Also ask her to clarify - detail exactly - the issues that she has with your work, then go back to the property and counter it with evidence - eg photographs - to the contrary.

Once you have enough to land a blow, tell her you'll be submitting a MoneyClaimOnLine.org, based on all this information.

I presume that, after this, you'll never want or need to work with her again?

fluffymuffy

Part II of the Scheme for Construction Contracts applies to the payment provisions of all commercial construction contracts. It is not optional and any contracts (written or verbal) which do not contain these provisions are automatically implied to include them. 

https://www.legislation.gov.uk/uksi/1998/649/made

Risteard

Screenshot any WhatsApps NOW as she can subsequently delete her messages, and it will remove them from your device.

Also NEVER sell materials to someone else without a substantial markup. You are supposed to be a business and not a charity. Make clear in future that she can't have "receipts" - your invoice to her will act as her evidence. She purchased the materials from you and not from your supplier. You are her supplier.

Act with extreme prejudice and aggression.

smifferson

ThisIsWeird said:

Communicate from now on only via a recordable means - text or WhatsApp, for example, no phonecalls (unless you can record them). See if you can capture and evidence what she's asking of you. Ask her what, exactly, she wants you to do about the invoices. Give her enough rope.

Keep utterly calm and factual. Also ask her to clarify - detail exactly - the issues that she has with your work, then go back to the property and counter it with evidence - eg photographs - to the contrary.

Once you have enough to land a blow, tell her you'll be submitting a MoneyClaimOnLine.org, based on all this information.

I presume that, after this, you'll never want or need to work with her again?

Yes I have saves all her voice notes to me and screenshotted the whole conversation. Thank you for your advice, I feel I have remained professional and calm throughout although have felt very angry underneath it all. I will look into the momeyclaimonline.org. never heard of that before.

And no I will not work with her again, I think she presumed she would get free labour for a day and I wouldn't chase the money.

smifferson

fluffymuffy said:

Part II of the Scheme for Construction Contracts applies to the payment provisions of all commercial construction contracts. It is not optional and any contracts (written or verbal) which do not contain these provisions are automatically implied to include them. 

https://www.legislation.gov.uk/uksi/1998/649/made

This is very helpful, thank you!