Sub-contracting Plumbers

[Carbonio]

I'm looking for a bit of advice.

We are looking into the possibility of starting a business that will install domestic water treatment units.


We are in an area with very few competitors around and my background is chemistry and water treatment but mostly in the commercial and utility sector.

In this day and age reputation is key, would you trust a sub-contractor to carry out the work once a job has been agreed, I'm just a bit worried about handing over the install side to someone else and not having control.

Am I been worried for no reason?

As a plumber would you take on a job for around 2 hours' work on an 'as needed' basis?

I would prefer to keep it all in house but I can't be out gaining customers and do the installs alongside my other commitments, and can't take any one else on until I have built it up as I want the company to grow organically without throwing a huge amount of cash at it.

Slowly slowly catch monkey in this day and age I think.

Can anyone offer any more advice?

 

[Homer J Simpson]

You should be able to find self employed plumbers willing to do this on a sub contractor basis. This however, will mean you are liable for CIS deductions and also for the quality of their work (or damage that they cause).

I would suggest at the very least getting something in writing between you and the plumber and agreeing a fixed price install cost with a few plumbers. When they're not busy, they (should) appreciate the work, when they're busy, pass it to the next available plumber.

 

[Carbonio]

You should be able to find self employed plumbers willing to do this on a sub contractor basis. This however, will mean you are liable for CIS deductions and also for the quality of their work (or damage that they cause).

I would suggest at the very least getting something in writing between you and the plumber and agreeing a fixed price install cost with a few plumbers. When they're not busy, they (should) appreciate the work, when they're busy, pass it to the next available plumber.

Thanks, I had no idea about CIS deductions but I do now, food for thought.

 

[Homer J Simpson]

No problem. It's easy enough once you've got you head around it. It's basically taxing labour (ignoring VAT & materials).

The fun part is getting plumbers to realise that you're paying THEIR tax as most will still want whatever they quoted as their 'take home' figure, expecting you to pay 20% - 30% more in order to cover this cost.

 

[Messn84]

I have just registered to correct Homer above.

Based only on the information in your original post, you wouldn't deduct any tax from a subcontract plumber, as the work is not construction work. The CIS (Construction Industry Scheme) is a scheme designed for the construction industry only, hence its name. Also, you are not a contractor (as defined by HMRC).

All the information you need regarding CIS is available at HMRC's website. Google HMRC and CIS.

Regarding your original question, you will not have a problem finding a suitable plumber to carry out the works for you.

A couple of things you could do to reassure yourself are:

• Use a Gas Safe registered engineer. Not necessary, but any old idiot can call themselves a plumber. Not every one can call themselves a gas engineer. Subsequently verify their gas safe status online.
• Ask for a copy of their public liability insurance certificate and call the insurer to check it is genuine.
• Consider using an engineer that has a WRAS (Water Regulations Advisory Service) certificate. This ensure they have at least a basic knowledge of the water regulations.

There are many, many good reliable trades people out there. Just go visit a couple or ask them to come to you until you feel comfortable with what they have to say.


Hope this helps.

 

[Scalloway]

There is information on CIS and installing plumbing equipment here

http://www.hmrc.gov.uk/manuals/cisrmanual/cisr14090.htm

the following operations are within the scope of the Construction Industry Scheme

• 'installation in any building or structure of systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection'

This provision is straightforward but you should note the following points

• only 'systems' of a type listed in the subsection above are included. Note that it does not include other systems that may be founding in a building or structure such as, public address, security, IT and so on
• it only applies to installation of these systems, not their repair or maintenance. Neither does it apply to their alteration or extension(s).
• replacement of a system, for example, complete electrical rewiring, amounts to installation
• installation of such systems in locations other than a building or structure is normally caught by the other provisions of FA04/S74 (2). For example, external illumination of a building often involves running power-lines to lights located at some distance from the walls. Power-lines are 'works forming part of the land (FA04/S74 (2)(b)).

 

[Messn84]

Just to back up what I said regarding you not being a contractor, from the HMRC website:

When are you a contractor under CIS?



Under the rules of CIS, you're a contractor if:

• you run a business that engages subcontractors for construction operations - a 'mainstream' contractor
• you run a business that spends an average of £1 million or more a year over a three year period on construction operations - a 'deemed' contractor

 

[Carbonio]

Thanks everyone for the advice. Will make things a lot easier to start with if we don't have to get involved with CIS.

I really appreciate the help.

 

[Scalloway]

You should note that the £1 million limit applies only to firms whose main business is not contracting. If contracting is your only trade you need to be sure that the type of work is non CIS.

 

[FarrellMackennon]

The best way forward is to get 3 or 4 experienced plumbers on your list to help out as and when required. There will more than likely be plenty of plumbers in your area that would appreciate the work but you only want those that are qualified, experienced, and enthusiastic. Always check customer testimonials, references and certificates out before hiring and conduct an interview so you get a relationship started and can see if you have a good feeling about the person.