Builders merchant legal issues

Builder holding yellow sledge hammer in hardware storeSome of the key areas where legislation is likely to affect your builders merchants business are listed below. The list is not intended to be exhaustive.

What licences does a builders merchant need?

You should be aware of the following areas where your builders merchants business may need to be licensed:

  • if you run vehicles with a gross plated weight of 3.5 tonnes (or more than 1,525 kg if they are not plated) you will need a goods vehicle operator's licence ('restricted' category if you only carry your own goods) - or a goods vehicle operator's licence in Northern Ireland. These can be obtained from your local Traffic Commissioner in Great Britain - contact details are available on the Gov.uk website. In Northern Ireland, contact the Transport Regulation Unit (TRU) of the Department for Infrastructure (DfI)
  • if you play background music in your outlet and/or in your warehouse area - or play music to callers through your telephone system - you'll probably need to obtain a Music Licence from PPL PRS Ltd. There is an annual fee for this which you can pay online on the PPL PRS website
  • consumer credit authorisation from the Financial Conduct Authority (FCA) is required if you offer credit finance to individuals. Note that these could include sole traders like builders and small partnerships, as well as private consumers. You can find out more about consumer credit on the FCA website

Construction products

Special Europe-wide regulations cover building products (except very minor items) and require them to be of satisfactory quality, fit for purpose, and suitable for constructing safe buildings that comply with all necessary regulations (such as Building Regulations). Many construction products must by law carry the CE marking and retailers must make sure that electrical equipment carries it. Even though the vote in the referendum of June 2016 was to leave the EU, EU laws continue to apply to the UK until it actually leaves.

A working knowledge of the Building Regulations and their requirements will also help you to stock suitable products and advise your customers appropriately.

Retailing and merchanting

There is a wide range of legislation that applies to retail and wholesale outlets and protects the interests of the consumer. It is particularly important to make sure you comply with all aspects of retailing and consumer protection legislation if your outlet is open to members of the public. For example, goods and services must not be misleadingly described and the retail price of goods must be clearly displayed. You will be responsible for making sure that all goods or services are fit for their intended purpose and are of satisfactory quality.

Matters to be aware of include:

  • retailers and suppliers are financially liable for the supply of any defective goods if the manufacturer cannot be identified under the consumer protection legislation. Specific regulations cover the safety of many products and retailers must only stock products which comply with these regulations
  • the sale, storage and use of any potentially hazardous substances is regulated under the Control of Substances Hazardous to Health (COSHH) Regulations. You should take all necessary steps to control the risks to health caused by things like dusty cement bags, silica dust blow-off from loose fine aggregates, storage of potentially harmful chemicals, and dust from cutting timber and sheet materials. You must also make sure that appropriate safety data is passed on to customers who purchase potentially hazardous products
  • the sale of knives or blades to people under 18 is prohibited under the Dangerous Weapons Act
  • it is an offence to supply a substance to a person under the age of 18 if the retailer suspects that the fumes are to be inhaled for the purpose of intoxication under the Intoxicating Substances Supply Act
  • metric measurements must be used on all pre-packed goods retailed, where these are sold by weight, length and so on under the Units of Measurement Regulations
  • businesses that sell or distribute chemicals may be affected by regulations referred to as REACH - this stands for the Registration, Evaluation, Authorisation and Restriction of Chemicals. REACH covers most chemicals that are manufactured or imported into the EU in quantities of one tonne or more in a year. You can find out more about how REACH may affect you on the Health and Safety Executive (HSE) website

You can get advice and guidance on retailing and trading legislation from your local Trading Standards department. Information about many different aspects of consumer protection and fair trading legislation is available on the Trading Standards Business Companion website. Information is also available on the Gov.uk website.

The environment

Legislation aimed at protecting the environment covers a wide range of matters, from waste disposal to safe storage of potentially harmful substances and pollution prevention. More information on all aspects of environmental legislation is available from:

  • the Environment Agency in England
  • Natural Resources Wales
  • the Northern Ireland Environment Agency
  • the Scottish Environment Protection Agency (SEPA) in Scotland

Substances that could be used to make explosives

There are special regulations in place to prevent substances that could potentially be used to make explosives getting into the wrong hands. Some substances, which would normally only be available from specialist suppliers, are regulated and can only be supplied to a member of the public who has a licence to obtain and possess them. Other substances, although not regulated, are nevertheless of potential concern. Examples of these, which are referred to as 'reportable substances', include sulphuric acid (used in products like some drain cleaners and brick/driveway cleaning products) and the solvent acetone.

You should report any suspicious transactions (or disappearances due to theft) involving regulated or reportable substances to the police Anti-terrorist Hotline on 0800 789 321. A transaction could be suspicious for various reasons, for example because the customer insists on paying cash and/or wants an unusually large quantity of a product containing a reportable substance.

There's more information for businesses about regulated and reportable substances on the Gov.uk website.

Timber

Under the Timber and Timber Products (Placing on the Market) Regulation 2013 any business that trades in timber and timber products must keep records for five years enabling them to identify and trace the source of timber to help prevent the import and use of illegally harvested timber. Guidance for traders on the requirements of the regulation is available from the Timber Trade Federation website.

Carrier bag charge

A 5 pence charge applies in England, but small and medium-sized businesses (with fewer than 250 full-time equivalent employees) are exempt. You can get detailed guidance from the gov.uk website.

Retailers in Wales and Scotland must charge customers at least 5 pence if they supply them with a single-use carrier bag. This applies to all types of single-use bag, whether they are made of plastic, paper or plant-based starch. There is detailed guidance on the Gov.Wales and Zero Waste Scotland websites.

In Northern Ireland retailers must charge customers a 5 pence levy on all bags with a retail price of less than 20 pence (including any bags that would otherwise be free of charge), whether they are single-use or reusable.

Health & safety, fire

You must comply with workplace health and safety and fire safety legislation.

Employment legislation

Anyone employing staff must comply with employment legislation. Important areas of legislation include:

Recruitment and employment contracts

Pay and pensions

Working time: hours, leave, flexible working

Employment policies

Sickness and sick pay

Maternity, paternity and adoption

Discrimination

Managing home workers, remote workers, lone workers

Discipline and grievance

Dismissals and redundancies

Employment tribunals

Insurance for a builders merchant

When you start up in business you will need insurance cover. Contact an insurer and explain exactly how your business will operate. They will then recommend what cover you should have. This might include:

  • employer's liability
  • public liability
  • product liability
  • premises, premises contents and stock
  • cash
  • business interruption
  • motor fleet insurance (for delivery vehicles)
  • goods in transit
  • computers - all risks

It is worth noting that some buying groups and trade associations for builders merchants offer their members special insurance policies, which might save you money and provide the level of cover you need. The Builders Merchants Federation (BMF), for example, works with insurers who have expertise in the merchanting sector to make specialist business insurance policies available to their members.

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