ABSTRACT
The “Definition of prime cost of daywork carried out under a building contract” provides that direct purchases of materials shall:—
• include costs of delivery to the site • allow cash discounts of up to 5 per cent to the
contractor • be net of trade discounts (which the contractor should
allow to the building owner) • be exclusive of VAT, provided it is recoverable by the
contractor: otherwise VAT forms a part of the cost chargeable to the client.