Is there a ‘safest’ way to pay trades?

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I’m scared of losing my savings, can you help a brand new to home owner out? I’ve been quoted £5k for a bathroom installation (suite and tiles), but he’s offered to reduce it to £4.5k if I pay cash. I don’t feel comfortable doing this but am I being stupid not to?

Then it got me thinking: are there any ways I’m ‘supposed’ to pay trades? Not all upfront I assume? If they ask for half upfront is that ok? Should I be putting it on a credit card for protection or can I pay direct from my bank?

Yes, you're being taken for a ride.

Any decent, long standing, legitimate contractor will have a good reputation with their suppliers and therefore have an account.

If you are being asked to pay cash up front for materials, it's dodgy.

If he isn't putting the job through the books, how can he offer a warranty. No paper trail means he can just deny he did the work or argue over the scale of the job.

It's normal for a small amount to be paid upfront to show commitment so they feel confident to book the job in their schedule. This is usually around 25%. It's then normal for a further 25% to be paid when they show up on site before commencing the work, with the remaining 50% to be paid within x number of days of completion.

This protects you and them. If you're not happy with the work, you have leverage to make sure any issues are rectified. If you can't/refuse to pay, they are only out of pocket for their time, not materials. So they haven't lost money, just not made any on that particular job.

Well firstly that sounds like tax evasion which is why he wants to take cash. Cash is less convenient than bank transfers so there is no real legitimate reason for doing this. That gives the impression that he is lacking in morals and I doubt he will be giving you any paperwork as a record of money changing hands.

I would be looking at getting somebody else to do the work if you can get somebody recommended from family or friends.

He might well be genuine and a hard worker but in your shoes I would want a signed contract and staged BACS payments agreed for a £5k project. Or ideally all paid upon completion.

Offering a discount for cash means he's fiddling his taxes, so that means he's not bothered about honesty and happy to break the law.

That's a massive red flag for me and I won't touch a trader who offers a "cash discount". I just walk away from them. I don't even want to pay the "full" price to get a receipt/invoice as I just can't trust anyone happy to break any law as they almost certainly are happy to break other laws too!

I’m currently doing a lot of work to my house and generally the payment is always made on completion of works - whether that’s in cash or transfer/invoice.

This year we’ve done - technical survey, insulation to roof, new roofing, plumber fixed a leak. All have completed work and sent an invoice that’s due within 2-4 weeks.

I’ve only ever paid companies some upfront and it would usually be in the contact. 10% at booking, x percentage when work start and x percentage when work is complete. It’s usually always pay on completion for smaller or independent tradesmen.

When I had my garden done the guy got me to call up the supplier and pay for the materials directly prior to delivery. Paid the skip at delivery and I then paid him when he had finished all the work.

I generally pay everything by bank transfer. I would only pay in cash if it was a really low amount and I have the money on me.

What I will say is the 1 person that offered a discount for paying cash totally fucked up my composite decking. It was fine when he finished but it’s starting lifting in places and bits falling off since. Total cowboy so beware. Just say you’ll pay by bank transfer if her can’t take credit card.

If he wants anything upfront you need a contract.

Don't ever pay all up front. Make sure you know exactly what it is you're paying for. A decent tradesman will have an account with suppliers and a line of credit. You want a paper trail for everything. An invoice, a guarantee etc.

It’s not worth the £500 saving if you then have problems that can’t be resolved because there was no formal contract. He might also fit your job in as a “homer” which he works on other contracted work so it could take forever. I’d be happier with a written quote for the work detailing what he’s doing and clear prices for materials and labour. I’m happy to do a staged payment, so 25% upfront, and remainder upon completion. I’ve just had a lot of work done on my house and all the contractors asked for full payment on completion, provided an invoice and receipt, two I did pay in cash because I had the money (and they invoiced), but £5k is a lot of money to have about the house so I wouldn’t do that. I’d be wary of anyone not giving paperwork to support their work.

We had our bathroom redone just before Christmas.

We declined to go with the man who wanted to be paid in cash and chose someone else.

We paid him by bank transfer - as agreed, half the labour costs at the end of the first week (job took two weeks) and the other half (plus materials) at the end.

The materials he supplied were things like plasterboard and grout as we ordered and paid for the tiles and the new basin, loo etc ourselves.

we found out the hard way that you need a quote or an invoice with a company name and physical address. that’s the only way they can be sued.

we did a cash builder for rough casting and lost thousands when it all fell off and trading standards said they couldn’t do anything without an address.

i wouldn’t pay cash now. never again. better to get a legit builder with an address thats a tax payer and legit.

oh and check on google that the address exists. i once looked up a plumber i was considering and he made a fake address.

like say it was “123 high street popular town” but i googled and the last building in the street was 121. I even went there to check. Unreal. so he was fly to the address thing and pretended he had one when he didn’t. dodgy as hell.

Another thing to consider is that it's that easy to send money electronically these days that there's rarely a legitimate reason to use large amounts of cash.

Therefore anyone requesting thousands of pounds from a bank is almost certainly committing or facilitating criminal behaviour in this case tax evasion.

Banks have a duty to prevent financial crimes from taking place so could refuse to allow you to withdraw the money to pay for the work or at least make it a very difficult and uncomfortable experience for you.

I have a close friend who is a stripper. Trust me…. People have uses for large amounts of cash that are legal 😂

Be wary of paying cash as absolutely guarantee you won't get any paper work or guarantees. I learnt the hardway on that one when having roofing work done.

Never pay cash. A deposit before starting is reasonable especially for a large job. Paying for materials in advance is not.