Busy on three jobs and still short for Friday's wages

Written for general builders, groundworkers, carpenters and joiners, roofers, plasterers, bricklayers and kitchen and bathroom fitters in the UK, from one-van firms to small main contractors.

The short version

1. Build a 13-week cash flow by job.Show applications, wages, merchants, subbies and HMRC payments by week. Refresh it weekly and find your lowest cash point.
2. Apply on time and keep stages paid.Send every application on its date. On homeowner jobs, take a deposit before ordering materials and never let more than one stage go unpaid.
3. Chase every retention on its release date.Keep a ledger of each retention and its contract release dates. Once a date passes on finished work, it is a debt: demand it.

Wages and merchants are paid before the client pays you. On a commercial job run on the Scheme's default timetable (which applies where the contract does not set compliant terms of its own), an interim payment can land about 24 days after the end of the period it covers: 7 days to the due date, then 17 more to the final date for payment. Retention waits longer still. So a builder can make a profit on every job and still be short of cash.

The 13-week job cash flow

Refresh it every week. For each job, show:

• Application dates, and the due date and final date each one triggers
• Materials, plant, wages, and subbies net of CIS
• VAT on your sales (none on sales under the reverse charge)
• CIS and PAYE due to HMRC by the 22nd if you pay electronically
• The lowest cash point, and the week it falls in

Valuing an interim application

Retention is a debt, not a savings account

Under the JCT default, retention is 3% unless the contract particulars say otherwise, and half is usually released at practical completion and half at the end of the rectification period. JCT main forms make the employer (other than a local authority) a trustee of the retention and, if you ask, require it to be kept in a separate bank account: ask in writing while the employer is solvent. As of Oct 2026.

Keep a retention ledger: the job, the amount, the contractual release events and dates, and when you last chased. Model each release from the contract's own practical completion and rectification dates, not an assumed year. Once the release date has passed on finished work, the money is a debt to collect.

Once its release date has passed, retention is a debt like any other: you can claim interest on it, and adjudication is available at any time.

Profit on paper is not cash in the bank

Your accountant measures profit by how far through the job you are, not by what you have billed. For example, on a £200,000 contract with £170,000 of estimated total costs, £85,000 spent means the job is 50% complete: £100,000 earned and £15,000 margin to date. If you have billed £110,000, £10,000 of it is cash you hold but have not yet earned.

Homeowner jobs and the winter

• Take a deposit before you order the materials for the job.
• Use payment stages the client can see on site, and never let more than one stage go unpaid.
• Open trade accounts with your merchants on 30 to 60 day terms.
• External work loses weather and daylight hours from November to February: put cash by in the summer or line up internal work for the winter.
• On commercial work, invoice finance can bridge slow applications; asset finance suits plant and vans.

Asked in Greymill

Ask it about your own business

Paste this into Greymill with your own figures, and Cash & Profit works it through for your business.

More for construction and building in the UK

• Setting a day rate that still pays after holidays, rain days and the vanWork out what an hour of labour really costs you, then price for the margin you want, not a markup that looks like it.Read the lesson
• Quoting the wrong VAT rate on a building job and paying it out of my marginAs of Oct 2026, building work can be 0%, 5% or 20% VAT depending on what is being built, and the rate has to be settled before you quote.Read the lesson
• Starting a job before building control, party wall notices and the phase plan are sortedNo general licence is needed to trade as a builder in the UK, but building control, party walls, CDM and asbestos all have to be dealt with before the first day on site.Read the lesson
• Homeowner or main contractor: the paperwork that decides whether I get paidA homeowner job runs on consumer law and a job for a business runs on the Construction Act, so the paperwork you need and the clauses to strike are different.Read the lesson
• My regular labour-only subbie looks more like an employee every yearCIS registration does not make someone self-employed. How to tell, what it costs if HMRC disagrees, and the checks builders skip when they take people on.Read the lesson
• Proving to homeowners, main contractors and councils that I am a safe pair of handsEach kind of client checks different proof: reviews and trust marks for homeowners, accreditation for main contractors, registration for public tenders.Read the lesson
• The main contractor has knocked thousands off my application without a proper noticeOn a construction contract a deduction needs a valid pay less notice served in time. Without one, the notified sum is due in full, and you have suspension, interest and adjudication behind you.Read the lesson

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