Pitfalls of paying the builder for your materials

A JONES •  Jun 11, 2017

I collected a job yesterday from Dr. S and as I was about to leave he explained to me, all his Jewson invoices are in the folder are in the name of bricklayers but with the plot address shown as a delivery point. We will call the bricklayers A & B Bricklaying in this instance. When I asked more questions, it was explained to me that due to the client being busy with work and lacking product knowledge he allowed A & B Bricklaying to visit Jewson on a regular basis, make purchases in their name, whereby he in turn reimbursed them in cash. Here we have a common problem. HMRC will only accept invoices in this instance (in the name of a 3rd party) if you as the dwelling owner can provide a paper trail showing you made the payment, direct to the supplier,(in turn proving you purchased the goods from Jewson). In this example, by reimbursing the contractor in cash on a ' as and when basis' , there is no paper trail and indirectly, it will be viewed, that you made the purchases from A & B Bricklaying, not Jewson. When I questioned, if the contractor might be vat registered (this would possibly allow us to obtain a vat invoice from A & B Bricklaying), the client advised he did not believe they were. In all probability, this vat will be lost in the system and the client, potentially has lost out on thousands of pounds. I am hoping to speak with A & B Bricklaying on Monday, fingers crossed.