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Quality or Cost

More than ever, our customers are wanting more for their money. With the rising popularity of internet shopping, electrical contractors can now get their hands on cheaper and lesser known products easily.

But are these products good value, or are we compramising quality over cost?

Benefits to working with more reputable manufacturers give contractors peace of mind that the goods have been rigorously tested, are of a high standard and comply to the latest regulations.  These manufacturers can also assist you in chosing the best product for your customer, giving you access to the latest developments, and make sure that you are using them effectively. However, this all comes at a cost.

When using budget’ or ‘lesser known’ products, high failure rates or low performance on products can be disappointing for customers. Call outs to rectify these problems can also be costly to the contractor (as well as affecting your reputation). Items which have not gone through necessary quality control also pose a significant risk. However, it does give customers on a tight budget the opportunity to carry out works that they may not have had the chance to before.

With contractors working within ever-tighter budgets, it can be extremely difficult to get the balance right between quality and cost.

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Reverse VAT charge

The reverse VAT charge was initially due to be implemented in October 2019 but was delayed until October 2020 to allow businesses more time to prepare.

What is the Reverse VAT Charge and how does it affect me?

The reverse VAT charge is a change to way that VAT will be accounted for in the building and construction industry. Otherwise knows as the domestic reverse charge, it is a change to the way that VAT is collected (with the intent to reduce tax fraud).

Currently it is the responsibility of the UK supplier to account for VAT. The changes move this responsibility to the customer, who will in turn be required to pay for the VAT and then recoup through its own VAT return.

Unlike CIS, the reverse VAT charge applies to whole of the service (including materials). Zero rated services will not be affected, nor will non-VAT-registered customers, or even end customers in the supply chain.

In the coming months, businesses are advised to prepare for the following

* Is your accounting software capable of registering the reverse charge

* Are your staff adequately trained in the changes

* Do you know the VAT status of your customers

* Will your cash flow cope with the changes

For more information, visit https://www.gov.uk/guidance/the-vat-domestic-reverse-charge-procedure-notice-735

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