Owed money....

[DanTheSpark89]

Hi all, i'm looking for some advice regarding some money I am owed. The situation is as follows....

I am qualified electrician who is currently at university. Last summer I worked for a "friend", doing a 6 bedroom rewire and some extra other jobs too, including some general help with some other projects he had. The total agreed value of the works was £6000. I am not a registered business and not currently registered with the NICEIC but had plans to finish and test the works with someone who is. There was no contract as this was supposed to be a friend but i'm quickly learning that this was a schoolboy error.... I do however have some written communications about money etc and I sent invoices at the time.

The works were essentially completed when I went back to university in September. I contacted the guy about the money as he hadn't paid me. At first he said he had £7000 stolen from his bank account, then some other excuses, and now finally, zero contact (ignoring my calls and messages). I have been extremely flexible and would have given him time had he just communicated with me and shown me some basic respect. He is no longer doing that, so I am losing my patience and looking at other methods to get paid.

Obviously now with coronavirus I imagine he isn't working at all and am further losing hope of getting paid what i'm due, £6000 is alot of money to me. Again, if he would just call and explain I would sit back and let him sort it out.

I am wondering what my rights are with this? I am looking at claiming against him through the courts, but as i'm not a registered business, have no contract and am not currently registered with the NICEIC I am sceptical that it is worth me doing this (and i think i'd have to pay around £500 to register the claim)

Any help or advice as to what my rights are would be greatly appreciated!

Stay safe

 

[SparkyChick]

Sorry to hear of your troubles.

My advice is write him a letter, include copies the invoices you've sent that have not been paid. Keep it simple, something along the lines of...

"Dear X,

Please find enclosed invoices x, y and z that are now all more than (however long the shortest is) months overdue. I have sent numerous reminders regarding these invoices but they remain unpaid.

Please arrange payment of the full outstanding amount within the next 7 days.

If they remain unpaid after this time, I will be commencing recovery action for the full outstanding amount and the associated recovery costs. If you wish to discuss these matters, you can do so in writing to the address above or via email (email address).

Yours sincerely

X"

I've had to do this a couple of times and a letter along these lines has done the trick every time. Keep a record of it, may even send it recorded or something like that so he can't deny he didn't receive it, if he phones ask him to put it in writing, if he gets abusive make a detailed note of the conversation and ask him to communicate in writing.

As an aside, has he given any valid reasons as to why he might not want to pay you? Did you complete the works as agreed? There are two sides to every story and we are obviously only hearing yours.

On the subject of no contract... if you have a paper or email trail where money and work have been discussed and agreed, that will go a long way in the absences of a formal contract, because most people won't go and do something for free, likewise most people don't let people they don't know or have an agreement with into their property to carry out works they know nothing about.

 

[ipf]

Bad news. I agree with above.
A few questions.
Did you complete the job or did someone else take over?
Were the testing and certification carried out and Part P registered.
Is anyone living in the house and, if so, since when?
Were any prior payment arrangements agreed? ie cash, cheque, on line?
Were any other trades involved and, if so, have they had problems?

Regarding small claims court. A verbal agreement is regarded as a contract. The more written information and details the better
as it is a case of two parties each putting their case to a judge and him making a resultant decision.
As long as everything is above board, it's not just a case of all or nothing, a sum being decided upon, along with payment arrangements, by the judge.
If you've got your 'house in order' so to speak, it's well worth taking on for the sum involved.
Get as much advice as you can.
As SC says, there are two sides to every argument and that is how the judge will see it.
Get that letter in the post along with an email.

 

[rapparee]

Hi all, i'm looking for some advice regarding some money I am owed. The situation is as follows....

I am qualified electrician who is currently at university. Last summer I worked for a "friend", doing a 6 bedroom rewire and some extra other jobs too, including some general help with some other projects he had. The total agreed value of the works was £6000. I am not a registered business and not currently registered with the NICEIC but had plans to finish and test the works with someone who is. There was no contract as this was supposed to be a friend but i'm quickly learning that this was a schoolboy error.... I do however have some written communications about money etc and I sent invoices at the time.

The works were essentially completed when I went back to university in September. I contacted the guy about the money as he hadn't paid me. At first he said he had £7000 stolen from his bank account, then some other excuses, and now finally, zero contact (ignoring my calls and messages). I have been extremely flexible and would have given him time had he just communicated with me and shown me some basic respect. He is no longer doing that, so I am losing my patience and looking at other methods to get paid.

Obviously now with coronavirus I imagine he isn't working at all and am further losing hope of getting paid what i'm due, £6000 is alot of money to me. Again, if he would just call and explain I would sit back and let him sort it out.

I am wondering what my rights are with this? I am looking at claiming against him through the courts, but as i'm not a registered business, have no contract and am not currently registered with the NICEIC I am sceptical that it is worth me doing this (and i think i'd have to pay around £500 to register the claim)

Any help or advice as to what my rights are would be greatly appreciated!

Stay safe

You say he is a friend

Do you still have a circle of mutual friends.

Maybe he just needs to be shamed into paying you.

 

[DanTheSpark89]

Sorry to hear of your troubles.

My advice is write him a letter, include copies the invoices you've sent that have not been paid. Keep it simple, something along the lines of...

"Dear X,

Please find enclosed invoices x, y and z that are now all more than (however long the shortest is) months overdue. I have sent numerous reminders regarding these invoices but they remain unpaid.

Please arrange payment of the full outstanding amount within the next 7 days.

If they remain unpaid after this time, I will be commencing recovery action for the full outstanding amount and the associated recovery costs. If you wish to discuss these matters, you can do so in writing to the address above or via email (email address).

Yours sincerely

X"

I've had to do this a couple of times and a letter along these lines has done the trick every time. Keep a record of it, may even send it recorded or something like that so he can't deny he didn't receive it, if he phones ask him to put it in writing, if he gets abusive make a detailed note of the conversation and ask him to communicate in writing.

As an aside, has he given any valid reasons as to why he might not want to pay you? Did you complete the works as agreed? There are two sides to every story and we are obviously only hearing yours.

On the subject of no contract... if you have a paper or email trail where money and work have been discussed and agreed, that will go a long way in the absences of a formal contract, because most people won't go and do something for free, likewise most people don't let people they don't know or have an agreement with into their property to carry out works they know nothing about.

Thanks, yes I will do something like this. I had tried to keep it friendly as I don't feel like I have much ground to commence recovery action or things like that. I will keep pestering him. Coronavirus really hasn't helped as he can't exactly pay with money he almost definitely doesn't have !

As to why he hasn't paid me - its solely because he has made a series of business errors and underestimated his cash flow. He only started on his own last April. A mutual friend who still works for him is also owed £thousands so I know I am likely to be waiting a while. Which like I said, I can handle but I can't accept zero communication as to what is going on !
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Bad news. I agree with above.
A few questions.
Did you complete the job or did someone else take over?
Were the testing and certification carried out and Part P registered.
Is anyone living in the house and, if so, since when?
Were any prior payment arrangements agreed? ie cash, cheque, on line?
Were any other trades involved and, if so, have they had problems?

Regarding small claims court. A verbal agreement is regarded as a contract. The more written information and details the better
as it is a case of two parties each putting their case to a judge and him making a resultant decision.
As long as everything is above board, it's not just a case of all or nothing, a sum being decided upon, along with payment arrangements, by the judge.
If you've got your 'house in order' so to speak, it's well worth taking on for the sum involved.
Get as much advice as you can.
As SC says, there are two sides to every argument and that is how the judge will see it.
Get that letter in the post along with an email.

Job was to be tested and signed off by a part p registered electrician. I don't know if that ever ended up happening.

No one was living in the house, the chap who owned it was renting nearby and visited regularly to see the progress. I heard through a mutual friend that his family have since moved in.

He paid me for 4 days work earlier in the year in the form of a bank transfer (which was 2 weeks late and should have been a red flag! ugh) other than that there are very little written communications between us. I have one message he sent back in october saying that he couldn't pay me yet because his bank account had been hacked into (hmm) but other than that not alot, other than me messaging him weekly asking for payment updates

The only other trade I know of is a painter he had/has working for him (who is also a mate of mine) who is also owed money! And as he still works for him/will be working for him I know he will get paid before me, so until he gets paid I definitely wont...

Like I said im not a registered business but at the same time I knew I wasn't going to be earning enough money to pay tax this year (as I was only working for that summer, nothing more) But i don't know if that leaves me looking suspicious and thus have no hope in claiming
[automerge]1587808956[/automerge]

You say he is a friend

Do you still have a circle of mutual friends.

Maybe he just needs to be shamed into paying you.

Yes I had considered a public facebook post or getting on to his partner. I have been resisting these sort of tactics until now as I didn't want to risk not getting it at all ....

 

[littlespark]

Follow the correct procedures, court or specialist collection firms.
DONT go down the name and shame on Facebook route because it just makes you out to the troublemaker.

 

[DanTheSpark89]

Follow the correct procedures, court or specialist collection firms.
DONT go down the name and shame on Facebook route because it just makes you out to the troublemaker.

Totally agree with this mate just concerned that I don't have much legal backing to make a claim, and it will cost me to do so.

I may just wait until corona blows over anyway as it feels pointless to try and get anything right now

 

[SparkyChick]

You may not have a fully written contract, but if you have evidence there was an agreement (the fact you went and did work and that he allowed you to is reasonably good evidence of this, and you have some communications between the two of you which sound as if they include scope and price) then you have a reasonable chance of recovery if it goes to court.

Most people will want to avoid it going to court because having a judgement against you can cause future financial problems. This is why the mere threat of recovery action will work in a lot of cases, not all, but most people if they are thinking straight will want to avoid involving courts.

His financial problems are none of your concern. He owes you money, as evidenced by the invoices (which from the sounds of it, he hasn't disputed) so regardless of whether he's a mate or not (I would suggest that after this is dealt with he won't be, or at least if he were my 'mate' he wouldn't be for very much longer) you need to start taking action sooner rather than later, even if your efforts only result in some communication where he states he'll pay you when the lockdown is over or something like that because that can help your case down the line because he will have acknowledged he owes you money and that he intends to pay. If he then reneges on that you can take further action.

Personally, I wouldn't sit on it any longer, but then I wouldn't have left it this long either.

 

[davesparks]

Like I said im not a registered business but at the same time I knew I wasn't going to be earning enough money to pay tax this year (as I was only working for that summer, nothing more) But i don't know if that leaves me looking suspicious and thus have no hope in claiming

Yes I had considered a public facebook post or getting on to his partner. I have been resisting these sort of tactics until now as I didn't want to risk not getting it at all ....

You don't need to be a registered business, but you must declare the income on your tax return, even if it is well under the tax threshold.
But that doesn't affect you chasing the money as you declare the income for the tax year when you receive it, not for the year you issue the invoice.

 

[littlespark]

Get the ball rolling now with a solicitor rather than waiting until lockdown finishes.
A letter from a solicitor now shows that you’re serious, and they might pay up.

 

[Risteard]

you declare the income for the tax year when you receive it, not for the year you issue the invoice.

That's for cash accounting.

Accruals accounting would require it to be declared for the invoice year, with a bad debt against it, and then resolved against this the following tax year.

 

[DanTheSpark89]

You may not have a fully written contract, but if you have evidence there was an agreement (the fact you went and did work and that he allowed you to is reasonably good evidence of this, and you have some communications between the two of you which sound as if they include scope and price) then you have a reasonable chance of recovery if it goes to court.

Most people will want to avoid it going to court because having a judgement against you can cause future financial problems. This is why the mere threat of recovery action will work in a lot of cases, not all, but most people if they are thinking straight will want to avoid involving courts.

His financial problems are none of your concern. He owes you money, as evidenced by the invoices (which from the sounds of it, he hasn't disputed) so regardless of whether he's a mate or not (I would suggest that after this is dealt with he won't be, or at least if he were my 'mate' he wouldn't be for very much longer) you need to start taking action sooner rather than later, even if your efforts only result in some communication where he states he'll pay you when the lockdown is over or something like that because that can help your case down the line because he will have acknowledged he owes you money and that he intends to pay. If he then reneges on that you can take further action.

Personally, I wouldn't sit on it any longer, but then I wouldn't have left it this long either.

Thanks, this is helpful to know!
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Get the ball rolling now with a solicitor rather than waiting until lockdown finishes.
A letter from a solicitor now shows that you’re serious, and they might pay up.

Yea cheers, i've just enquired with a few solicitors. I have no experience with this kind of thing so I will see what they come back with!

 

[davesparks]

That's for cash accounting.

Accruals accounting would require it to be declared for the invoice year, with a bad debt against it, and then resolved against this the following tax year.

Where on a tax return form do you record bad debts?

 

[PEG]

Hi,is the money owed,for labour only?

 

[Vortigern]

I have pm you regards action you can take. Look at the envelope on the blue bar.

 

[Zerax]

Where on a tax return form do you record bad debts?

In double entry terms, you'd debit 'Bad Debts' in your expenses and credit 'Receivables'. You'd still recognise the sale, but as far as profit is concerned it's offset by the bad debt. (I've ignored VAT in the above example)

 

[davesparks]

In double entry terms, you'd debit 'Bad Debts' in your expenses and credit 'Receivables'. You'd still recognise the sale, but as far as profit is concerned it's offset by the bad debt. (I've ignored VAT in the above example)

I never asked about accounting methods nor made any statement about such.
What I said was the income must be recorded on the OP's tax return for the year that it is earned.

 

[DanTheSpark89]

Hi,is the money owed,for labour only?

Yes it is unfortunately. We picked up materials together whenever I needed bits and he paid for those.

 

[Zerax]

I never asked about accounting methods nor made any statement about such.
What I said was the income must be recorded on the OP's tax return for the year that it is earned.

My bad DS... I was answering your question "Where on a tax return form do you record bad debts?"

 

[PEG]

Hi,so how did you get 6G behind,labour only?

I could have missed something,but either you went a long time,with no complaint,or a short while,with high expectations

 

[davesparks]

Yes it is unfortunately. We picked up materials together whenever I needed bits and he paid for those.

Well that's good that you aren't out of pocket for a load of materials.

But how on earth did you end up £6k down on labour only? That must have been a fair few weeks work and you'd surely walk away after the first week went unpaid?

 

[DanTheSpark89]

Well that's good that you aren't out of pocket for a load of materials.

But how on earth did you end up £6k down on labour only? That must have been a fair few weeks work and you'd surely walk away after the first week went unpaid?

I did around a months general work just helping out for him on a day rate

THEN I started a 6 bedroom rewire for him, including garage, outhouse etc, huge job. We agreed a cash price of £4500 for this, to be paid once job completed.

Because the job was agreed on a price, that is why so much debt has amounted. To be honest I clearly gave him far too much trust and left myself too exposed. He was 2 months into his business and I gave him too much flexibility with money. Lesson learnt.

Have heard from some solicitors that want £150p/h for a call to discuss the issue.. then god knows how much else to write letters etc... Am now considering my options. Just gave him an early morning call and surprise surprise... no answer.

 

[littlespark]

Solicitors usually give a free hours consultation, and give you prices for any further work. If it goes to court, you can claim your expenses back from him as well... but let’s say fees come in at £500 all in, you win the case and he pays you the 6k.... you have 5.5k you wouldn’t have had otherwise.

Try citizens advice. They have local solicitors that offer the free hour.

The trouble is, that if this is through his business, and he liquidates it, you could get SFA.
However, if it is a personal debt, HE is liable, not his business.

Collect any paperwork concerning the job, copies of any invoices you sent, and any texts or emails between you and have them to show the solicitor..

And I have to stress again.... DONT wait for lockdown to finish to get the ball rolling...

 

[Jurassic Sparks]

I would buy a dinosaur suit and a giant rubber sex toy and batter him senseless with it, in a public place
make sure you video it !
because it will be highly amusing, and the advertising revenue on you tube will more than cover the losses !

in the real world, you are not going to get anything, he sounds like a chancer, a shyster , a -------- artist, a ligger etc

write it down to experience, finish uni , and make money that way

I spent years chasing a so called mate over a bad debt, gave up in the end it was making me ill
Turned out he stiffed lots of other folk as well, when he died ( natural causes) we all went to the funeral, to make dead sure he had really snuffed it
then raced to the pub and helped ourselves to everything ( then got taxis home)

I have had a few people stiff me for money over the years, that taught me to do everything in writing, and to avoid certain people
my brother in law for instance is a drunk ( 3 driving bans) tried to get me involved in going halves on a property and renovating it and selling it
I thought about the possible profits for all of 3 seconds and told him
well I wont write on here because its a very old scrapmans insult
turned out afterwards, he owed money all over the place

Another bloke who stiffed me was so good at it that he could have been a consummate professional, and taught con artists for a living
I never got my dosh back from him either, but i had great fun over 15 years introducing myself to him , when he was trying to hook another mark in

 

[littlespark]

hey @Jurassic Sparks , you're not very good at choosing friends/ customers/ family members....

Damn annoying when it happens though.

Only one person hasn't paid me, so I took them to court and won. They still owe me, and i'll get it eventually... but their £300 debt is gonna cost them 3 times that.

I'm not going to let it be known that i'm a soft touch and doesn't chase debts, even for £300.

 

[drilltoaster]

I did around a months general work just helping out for him on a day rate

THEN I started a 6 bedroom rewire for him, including garage, outhouse etc, huge job. We agreed a cash price of £4500 for this, to be paid once job completed.

Because the job was agreed on a price, that is why so much debt has amounted. To be honest I clearly gave him far too much trust and left myself too exposed. He was 2 months into his business and I gave him too much flexibility with money. Lesson learnt.

Have heard from some solicitors that want £150p/h for a call to discuss the issue.. then god knows how much else to write letters etc... Am now considering my options. Just gave him an early morning call and surprise surprise... no answer.

I have used (Thomas Higgins) online correspondence before it which gives him 14 days to respond to them why he hasn't paid. After 14 days they will send you a email to press take to court action. Which will happen the very next day and always use high court recovery. It worked for me I ended up giving a reformed company their first ccj after having threats from their md and they now have been wound up. I got my money the day of court and they had to pay extra for the high court recovery aswell.

 

[Jurassic Sparks]

hey @Jurassic Sparks , you're not very good at choosing friends/ customers/ family members....

Damn annoying when it happens though.

Only one person hasn't paid me, so I took them to court and won. They still owe me, and i'll get it eventually... but their £300 debt is gonna cost them 3 times that.

I'm not going to let it be known that i'm a soft touch and doesn't chase debts, even for £300.

you cant choose your family !!!
I have very few close friends, but they are a good team
we do man stuff together for a laugh
and to raise money for charity
but over many years you will meet people like that
The trick is to see the funny side, or catch them much later
Maurice the last one, had a very unpleasant meeting with two large police sergeants, after I noticed his car parked up in Stroud, in the station car park, with a double barrelled shotgun in the back on view and not covered !
there were a few problems with his car as well, a meeting without coffee up the nick followed with free accommodation and a court appearance

 

[PEG]

Anywho.....back to the OP's problem...so,you did the first month on a day rate,and didn't get squared,you then took on another job,did a month or two more,and got nothing more at any stage.

You are not going to get paid. There is a faint hope,he may give you something eventually,but it will be down to the association,time spell,embarrassment,and it will be a pittance and once.

Meanwhile,your ex-employer,will be trying the same crack,with anyone who bites..

Take it as an expensive lesson,but one that could save you fortunes,in the future.