Employing a friend.....

[Hay Farmer]

Just used a friend (who has recently started up in business) to fit a small hot water system for a toilet block for me. Normally when employing trades I buy all major materials and just pay labour & consumables etc... I told my friend this, but he said he wanted to buy the hot water kit to increase his business turnover so that he could get a 2nd mortgage on his house. So I said ok....

Didn't discuss labour rates, but he gave a rough quote of £1400 plus vat plus a days labour. We subsequently changed the spec of the system a bit so was expecting to pay bit more.

Received the invoice on Friday, 1hr after he'd sort of finished the job, £2400 inc vat. It turns out he is not registered for vat so I can't claim the vat back on materials. The kit cost £1350 plus vat, I know because it was delivered to my place from the online shop with a detailed delivery note which took me all of 5 mins to price up. His hourly rate is only £15 but he was obviously inexperienced and it took him 2 days to fit it.

I queried the bill and the lack of a vat invoice which he didn't really understand, but paid him anyway in full.

Have had further conversations with him - he thinks I'm unreasonable "because these jobs are usually charged at £4 - 5000 and I've had it at half price

I'm cross because he's stuck £550 markup on the hot water kit, and I can't claim back the £270 vat - all because I did him a favour.

The money's gone and I shan't use him again but am I right to think he's abused my trust or is that "just how businesses work" as he maintains?

 

[Sussex Martin]

He's a prat and has proved that he is no businessman and has little understanding of customer relations or finances. Stand back and watch his business fail.

 

[marco]

Let it be a lesson to everyone, never give a big job to a newbie. Either wait till they have done work for someone else to hear the report or get them to do a few small jobs first.

 

[David.]

Both of you seem to have had a poor understanding of how it works.
How did you expect to get the vat if you didn't ask if he was registered?

 

[Hay Farmer]

I understand how vat works, but am guilty of not asking him if he was vat registered. I just assumed he was if he is supplying materials to businesses. As a friend he should have warned me that he wasn't vat registered.

 

[RWG Contracts]

Let it be a lesson to everyone, never give a big job to a newbie. Either wait till they have done work for someone else to hear the report or get them to do a few small jobs first.

the op says a small hot water system. If you don't give new starters a chance they'll never get anywhere.

To the op get another heating engineer to come out and give you a written quote for the job, if it's more than your mate say nothing if it's less present him the quote

 

[multi power]

I understand how vat works, but am guilty of not asking him if he was vat registered. I just assumed he was if he is supplying materials to businesses. As a friend he should have warned me that he wasn't vat registered.

You should have asked if he was vat registered, if he was much of a friend he should have said he wasn't and let you supply the materials

 

[wr.]

"If I could sell my experience for what it has cost me, I'd be a millionaire."

 

[Dry Rot]

Be wary of employing friends or neighbours.... A good turn seldom goes unpunished.

 

[Tarw Coch]

If he's a good friend then he's very naive about business, as a good friend should have been more than happy for you to buy the materials, he has effectively cost you 20% more than needs be.
I'd certainly be questioning myself about how good a friend he is and depending on the answer would have to either bite my tongue or decide he wasn't worth bothering with as he can't be trusted. Hard to see the full picture on here but thinking the latter.

 

[Renaultman]

"If I could sell my experience for what it has cost me, I'd be a millionaire."

Me too, and the bill keeps rising

 

[roscoe erf]

i hate working for friends and family easiest way to loose both

 

[Goweresque]

I'd have words. Even if you can't claim the Vat on the materials back, which was your mistake really in not asking if he was registered, AND you accept that the one days labour became two, that still only adds up to £1860. He's basically charged you £780 for 2 days labour fitting the system, if I understand correctly.

As the quote was for £1400 plus vat (which is £1680) and a days labour, all that changed was the extra days labour. So I'd add on another £120 for an 8 hour day, and pay him £1920 and never use him again.

 

[Kiwi Pete]

Is that why @Gator is in hiding?

I'm very wary of friends, my wife has a mate who runs her parent's dairy- constantly employs friends to "give them a chance", constantly gets dragged into personal issues and gets let down.
Very difficult situation when it goes pear shaped.

 

[MickW]

If he's a good friend don't fall out with him just let him know your not happy and and why then move on, in the long run the friendship is more important than a few quid.
If he not a good friend that's a different story.

 

[Doing it for the kids]

I think the threshold for VAT is about £80k turnover so unlikely many startups will register straightaway in the profession.

As others said he doesn't have much business nounce if this is how he treats 'friends'. Wait till he tries that with tricky clients.

6 months time he will back on someone's full time payroll you wait

 

[RWG Contracts]

I think the threshold for VAT is about £80k turnover so unlikely many startups will register straightaway in the profession.

As others said he doesn't have much business nounce if this is how he treats 'friends'. Wait till he tries that with tricky clients.

6 months time he will back on someone's full time payroll you wait

I registered straight away

 

[neilo]

I think the threshold for VAT is about £80k turnover so unlikely many startups will register straightaway in the profession.

As others said he doesn't have much business nounce if this is how he treats 'friends'. Wait till he tries that with tricky clients.

6 months time he will back on someone's full time payroll you wait

VAT registration is compulsory at around £80k turnover IIRC, but you can register voluntarily at way below that level.

This guy doesn't sound like much of a friend to me.

 

[ARW]

I registered straight away

I was still at college when mother registered me for vat!

 

[RWG Contracts]

I was still at college when mother registered me for vat!

Same here 19