Builders Discount-what is it?

OPENROAD

Have recently had renovations done at home, one was upgrade to heating system, we employed a builder for all works,they sub contracted for plumbing works, amongst the costs for this element is an item called "builders discount" which has been added onto bill, although it was in initial quotes, I just missed it at time, when querying this cost I was told that it was just a cost that dates back years that is used by all building firms,I'm confused

kkelliher

when a builder subcontracts out work they add on 5% to the subcontractors price for themselves. this is what it is.

secman

Builders get to add 1/19 on to all subcontracted work. The subcontractor usually shows this on their invoice but are not paid it by the builder.
The client will pay this , it is deemed a management handling fee from the builders point of view, as he still has to supervise and co-ordinate all subcontracted work and is ultimately responsible for it at the end of the day.

It goes back donkey years.

Secman

AidoCQS

If you ask your Main Contractor to take on a subcontractor of yours, ie. a nominated subcontractor then he is entitled to 1/19 (5.26) MCD (Main Contractors Discount) which will be added to the subcontractors pre-Vat figure.
This is typical say if you have no idea of what wiring you are going to do. You include an allowance or PC Sum for say 20k for these works when employing your Main contractor, then six months down the line when you have a plan, you or your Main contractor obtains bids, what ever the bid is, the Main contractor is entitled to add 1/19th to it and present that to you for payment.

The only people in the country who dont recognise this is the Govt. MCD is not written anywhere so they will not acknowledge it. There is instead a clause covering a thing called 'Prompt payment' and that is 1/39th or 2.5%