AIBU to wonder are neighbours quoting loft conversions prices without the VAT?

[Attheendofthedaywhenallsaid]

Hi, for the past couple of years I have had neighbours and friends (and more recently builders) tell me their loft conversion cost 45k. Now I am receiving quotes for a loft conversion for much more than 45k and also PLUS VAT. so that's another 9k!!!
Do people usually say the price of a build without the VAT bit? or do they say "my loft cost me 45k (and then whisper under their breath "plus don't forget the 9k for VAT).
Just really confused - and shocked at my 70k (that's INCLUSIVE of VAT) quote for a loft with dormer and bathroom (Suite, carpets, radiators not included)

That sounds about right to me. Usually £50K as a baseline but depends what fripperies you are having. That’s for someone good mind you.

My loft conversion 6 years ago including bathroom and 2 dormer windows cost £35k all in - including all fittings, carpets etc so I think you’ve just got a ridiculously excessive quote maybe?

Construction prices have definitely rocketed since COVID struck.

I think all trades are very busy at the moment and have put up their prices accordingly.

I think you're making a complication where there isn't one.

Prices have risen a lot in the past year and a loft conversion isn't a set thing. You're being unreasonable to expect the costs to be the same for everyone for all time

Materials have gone up by 30-40%.

Wow-prices have rocketed! Our loft conversion was £25k ten years ago!

I had one in London last year. 36+vat, for the shell, so bathroom, painting, carpet etc on top. Two bedrooms, with one en-suite.

We are negotiating and may get the price down to 50k plus VAT so 60k all in. But we will still need to decorate, carpet, provide the bathroom suite and my husband will be doing most of the electrics.
We have chosen a very good builder but we only own a small 3 bed semi, its not a mansion. Surely prices have not risen that much?

was that 25k plus VAT or just 25k?

The cost of materials has rocketed in the last bit.

Bag of concrete mix last feb (2020) shortly afterwards was upwards of £50.

There’s a shortage of materials at present too, some of the trades I know in building and landscaping can only get enough materials to work every other week (as an example) so prices will rise.

I will pick up on your VAT question directly because it is in danger of being lost.

VAT adds 20% onto the cost. The builder acts as an unpaid collector of taxes and gets in from you and pays it to HMRC. The quid pro quo is they can if they are VAT registered claim all the VAT they incur on skip hire, Jewsons, Travis & Perkins materials etc.

The building industry is rife with tax fraud.
www.gov.uk/government/publications/publishing-details-of-deliberate-tax-defaulters-pddd/current-list-of-deliberate-tax-defaulters

Many builders will quote and then add VAT on as an afterthought. In my experience the chances of a builder quoting ex-VAT and then trying to collect the additional VAT later indicates there is something amiss with their VAT 'records'. I was charged VAT of £8,000 as an afterthought and then when I got the invoice the VAT number did not register on the VAT number checker:
www.gov.uk/check-uk-vat-number

The builder pocketed the VAT and then put the company into liquidation. I helped HMRC recover it.

I live in SW London/Surrey border...and my extension with dormer was only £45k incl VAT. We had 4 quotes ranging from £40k to £70k, so suggest you get some more quotes!

@Hfjshdhs thank you for responding

@TeardropsFallingOnHotSand thank you

Just paid 44.4k Inc vat for a hip to gable full rear dormer with bathroom on a 3 bed semi in South East. We've spent a further 10k on fire doors, carpets, bathroom suite, tiler, tiles, rads and decorating etc. Thr quote was done pre covid though and even though we pushed the date back a couple of times they held the price for us

@ExpectingToFly Very helpful. Thank you so much!

Currently waiting for our loft conversion, costs are approx 45k incl vat, doesn't include tiling, painting or carpets. Been waiting since August 2020 and the company are taking bookings into 2023

I work in construction supplies and the prices have gone up record amounts, I’ve actually checked, double checked and triple checked when receiving manufacturer quotes as my eyes wouldn’t believe what they were seeing (been doing this over 20 years), added in to it material shortages (we’ve had customers on two weeks waiting lists for cement), haulier shortages (a lot of our standard products are on an 8-10 week wait purely because of lack of haulier capacity) all of these will put more pressure on builders. There is also more demand for home improvement so the two situations have created a perfect storm.

With all that said, for a project Iike yours I would definitely be seeking more than one quote. Hope it all goes well.

I work in admin for a major house builder, due to a combination of factors (including brexit and COVID) build costs have risen sharply in the last two years. I personally would wait until people can start spending money on holidays and leisure, this will take the attention/spend away from home improvements (loft conversions) and you will get a more reasonable quote!

Even if they aren't on a fiddle, I think it's quite common for tradespeople to quote without VAT - whether because it doesn't register with them when pricing up a job, or because they're irritated that they have to collect all that tax for the government and thus make their own price look much worse.

I suppose any business could do that if they wanted to - imagine if petrol stations gave their price of 25/30p a litre and then added on all the tax that they collect on behalf of the government at the till! Then again, it's a level playing field for most businesses, whereas a lot of part-time tradesmen can legitimately not qualify to have to charge VAT. It does seem like a hefty punishment for success or working harder/more hours, though, when you breach the threshold and the government automatically increases your prices by 20% - and you don't see a penny of it, rather have to spend more of what you have earned to process the VAT payments.

That said, that's just how it is and I personally think it should be illegal (trading standards, not throw-away-the-key-style) to quote prices excluding VAT to a consumer (unless VAT isn't payable, of course), as opposed to a business which will be in a position to reclaim the VAT as a business expense.

1. Brexit - no easy movement of goods and materials from the continent. Many lorry drivers are self employed and it’s a pain to get back and forth with the paperwork so they don’t take jobs involving driving outside of EU/Shengen zone.

1. Covid - earlier restrictions have caused backlogs.

Prices won’t go back to pre Brexit levels but may reduce a bit once Covid over.

I didn't pay VAT on mine as my builder was not VAT registered. He's a sole trader, we paid his subbies direct and paid for materials directly.