Opening Trade Accounts: Jewson, Travis Perkins and Screwfix Pro — Credit Terms and Discount Structures

Quick Answer: A builders' merchant trade account gives you priced-up quotes, account discounts (typically 5-40% off list depending on volume and product category), and either a cash account (pay-on-collection at trade price) or a credit account (typically 30 days end-of-month settlement). Credit accounts require a credit check and often a personal guarantee. Late payment is governed by the Late Payment of Commercial Debts (Interest) Act 1998, and any consumer-facing finance you arrange must comply with the Consumer Credit Act 1974 and FCA rules — but a merchant account between two businesses is not regulated consumer credit.

Summary

A trade account is the single biggest lever a tradesperson has on material margin. The difference between walking into a merchant as a member of the public and buying on a well-negotiated account can be 20-40% on the same product. Over a year, on a sole trader turning over £80,000-£150,000 with a 40-50% materials content, that discount is the difference between a viable business and a struggling one.

There are two distinct things people mean by "trade account". The first is a cash trade account — you are recognised as a trade buyer, you get trade pricing, but you pay at the point of collection or delivery. The second is a credit account — the merchant extends you a credit line and invoices you monthly, giving you 30-60 days to pay. Cash accounts are easy to open (proof of trade, sometimes just a business card and a VAT number or UTR). Credit accounts require a credit check, references, and frequently a director's personal guarantee.

This guide covers the three account types most UK tradespeople hold — a national merchant (Jewson, Travis Perkins, MKM, Buildbase), a trade counter chain (Screwfix Pro, Toolstation), and an electrical/plumbing specialist (CEF, City Plumbing, Wolseley/Plumb Center) — and explains how discount structures, credit terms, retention of title, and personal guarantees actually work so you can negotiate from a position of knowledge.

Key Facts

• Cash trade account — instant trade pricing, pay on collection; no credit check; opens same day
• Credit account — 30 days end-of-month (EOM) typical; some offer 60 days EOM; requires credit check
• 30 days EOM — invoices dated in a calendar month are all due on a fixed day (often the last day) of the following month, so an invoice on the 2nd gets nearly 60 days
• Personal guarantee (PG) — limited company directors are usually asked to personally guarantee the account, removing limited-liability protection on that debt
• Retention of Title (RoT) — merchant terms almost always include a Romalpa clause: goods remain the merchant's property until paid for in full
• Discount off list — varies by category: timber and aggregates 5-15%, plumbing/heating 20-40%, plasterboard 15-30%, fixings/sundries 10-25%
• Spend-based tiers — discount typically reviewed quarterly against spend; higher spend unlocks better pricing
• Credit limit — set by the merchant's credit insurer; £1,000-£5,000 for a new sole trader, £10,000-£50,000+ for established firms
• Late Payment of Commercial Debts (Interest) Act 1998 — entitles the merchant to statutory interest (8% above Bank of England base rate) plus fixed compensation if you pay late
• Screwfix Pro / Trade — loyalty scheme with cashback-style rewards, trade pricing on selected lines, and a 30-day credit option via a separate card
• VAT — all merchant invoices are VAT-inclusive at 20%; reclaim if VAT-registered
• Pro Rewards — most chains run points/cashback schemes (Screwfix Pro, Toolstation Trade, Selco Trade Card)
• Account application — needs business name, address, trading time, bank details, and (for credit) two trade references
• Stop list — exceed your limit or pay late and the account is suspended ("on stop") until cleared

Quick Reference Table

Detailed Guidance

Cash Account vs Credit Account — Which to Open First

A new sole trader with no trading history will struggle to get a meaningful credit limit, because the merchant's credit insurer has nothing to underwrite. Open a cash trade account first. You get trade pricing immediately, you build a spend history at that branch, and after 3-6 months of regular spend you have leverage to ask for both a credit facility and a better discount tier.

The cash account also protects your cash flow discipline. New businesses that open credit accounts too early often run up balances they can't clear at month-end, get put "on stop", and damage the relationship before it's established.

Apply for credit once you have: a trading history of 6-12 months, a business bank account with regular turnover, and ideally two existing trade references (other merchants you pay on time). Limited companies filing accounts at Companies House will be credit-scored automatically; new companies with no filed accounts will almost always be asked for a personal guarantee.

How Discount Structures Actually Work

Merchant pricing is a layered system, and the headline "we'll give you 20% off" is meaningless without knowing 20% off what. The layers:

• List price (RRP) — the published catalogue price, which almost nobody pays
• Trade price — the standard discount off list for any trade account holder
• Negotiated price — your account-specific discount, set against your spend tier
• Special / project price — a one-off quote for a specific large job, often beating your standard discount

Discount is category-specific. A merchant makes very little margin on commodity timber and aggregates (so your discount there might be 5-10%), but a healthy margin on plumbing, heating, plasterboard, insulation, and bathroom suites (where discounts of 25-40% are common). This is why two tradespeople can both say "I get 25% off" and pay completely different prices — it depends on the basket mix.

The negotiating play: ask for your discount to be reviewed by category, not as a blanket figure. Bring competitor quotes. Ask specifically for "project pricing" on big jobs — most merchants will sharpen the pencil for a £3,000 bathroom or £5,000 timber package because they want the volume.

30 Days EOM — What It Really Means

"30 days end of month" (EOM) is the standard credit term, and it is more generous than "30 days from invoice". With EOM, every invoice in a calendar month becomes due on a fixed date — usually the last day of the following month. So:

• Invoice dated 2 March → due 30/31 April (≈ 59 days)
• Invoice dated 28 March → due 30/31 April (≈ 33 days)

The practical effect: buy heavily at the start of the merchant's billing month and you get nearly two months of free credit; buy at the end and you get barely a month. Smart buyers time large purchases for the first few days of the merchant's statement cycle.

Some merchants offer early settlement discounts (e.g. an extra 2.5% for paying by direct debit on the 20th of the month). If you have the cash flow, these can be worth more than haggling on headline discount.

Personal Guarantees and Retention of Title

Two pieces of small print catch out limited company directors.

Personal guarantee (PG): when you sign a credit account application as a director, there is almost always a PG clause making you personally liable for the company's debt to the merchant. If the company fails owing the merchant £8,000, the merchant can pursue you personally — your limited liability does not protect you. Read the application. If you are not comfortable giving a PG, ask for a lower credit limit secured without one, or stay on a cash account.

Retention of Title (RoT / Romalpa clause): merchant terms state that goods remain the merchant's property until paid for in full. In practice this means that if you go insolvent before paying, the merchant can — in theory — reclaim unfixed materials still identifiable on site. Once materials are incorporated into the building (bricks laid, pipes installed) RoT generally fails because the goods have lost their identity, but loose stock is recoverable. This matters mainly in insolvency, but it is why merchants are nervous about large unpaid balances.

Screwfix, Toolstation and the Trade Counter Model

Screwfix and Toolstation operate differently from traditional merchants. They are catalogue/collection counters with consistent national pricing rather than branch-negotiated pricing. Trade benefit comes through:

• Screwfix Pro / TradeUK card — a separate credit facility (operated under the TradeUK brand) giving 30-day terms, plus a points/cashback rewards scheme
• Toolstation Trade — trade pricing on selected lines plus a rewards scheme
• Consistent pricing — you generally won't negotiate a bespoke discount; the value is speed, stock availability, and rewards

For fixings, fasteners, power tools, PPE, and consumables these counters are usually competitive without negotiation. For volume building materials, plumbing, and heating, a negotiated account at a full-line merchant will beat them.

Managing Multiple Accounts

Most established tradespeople run 3-5 accounts: a general builders' merchant, a discipline-specific wholesaler (electrical or plumbing), a trade counter for consumables, and often a second general merchant to keep the first honest on price. The discipline:

• Reconcile statements monthly against your own records — merchant pricing errors are common and rarely in your favour
• Keep balances within limit to avoid going "on stop" mid-job
• Use one card/account per job where possible so material costs map cleanly to quotes (this is exactly where job-costing in a quoting tool earns its keep)
• Pay on time — your payment record is your single best negotiating asset for better discount

Frequently Asked Questions

Do I need to be VAT-registered to open a trade account?

No. You need to demonstrate you are trading — a business card, headed paper, a UTR (Unique Taxpayer Reference) for sole traders, or a company number for limited companies. VAT registration is not required, though VAT-registered businesses find the account more valuable because they reclaim the input VAT on materials. See vat for trades.

Will opening a credit account affect my personal credit score?

Opening the account triggers a credit search on the business (and on you personally if you give a PG). For a sole trader, business and personal credit are effectively the same, so it can show as a search. For a limited company, the search is primarily against the company — but the personal guarantee means a default could ultimately reach your personal file. Paying on time has no negative effect; defaulting does.

What happens if I pay a merchant late?

First, the account is put "on stop" — you cannot buy on credit until the balance is cleared, which can halt a job mid-week. Second, under the Late Payment of Commercial Debts (Interest) Act 1998 the merchant is entitled to statutory interest at 8% above the Bank of England base rate plus fixed compensation (£40-£100 per invoice depending on debt size). Third, repeated late payment damages your discount negotiating position and your trade references.

Can I get the same discount as a big builder?

Not on day one. Discount tiers are spend-driven, and a £2m-turnover contractor commands pricing a sole trader cannot. But you can close the gap by: consolidating spend with fewer merchants (rather than spreading it thin), timing large purchases for project pricing, joining a buying group, and reviewing your discount quarterly with branch management. A focused sole trader spending £40,000+ a year with one merchant has real leverage.

Should I use a buying group?

Buying groups (e.g. NMBS-affiliated independents, or trade federation buying schemes) pool member spend to negotiate better terms than an individual could. For a smaller firm they can unlock discounts otherwise reserved for large contractors. The trade-off is you may be steered toward the group's preferred suppliers. Worth investigating once your annual material spend is consistently above £30,000-£50,000.

Regulations & Standards

• Late Payment of Commercial Debts (Interest) Act 1998 — statutory interest and compensation for late B2B payment

• Consumer Credit Act 1974 — governs consumer credit; a B2B merchant account is generally NOT regulated consumer credit, but any finance you arrange FOR a customer is

• Sale of Goods Act 1979 / Sale of Goods Act 1979 (as amended) — title, retention of title (Romalpa) clauses

• Companies Act 2006 — director duties and personal guarantees for limited companies

• Financial Conduct Authority (FCA) — regulates consumer credit broking if you offer customers finance options

• General Data Protection Regulation (UK GDPR) / Data Protection Act 2018 — credit checks process your personal data; see gdpr for trades

• GOV.UK — Late commercial payments: charging interest and debt recovery — statutory interest rules

• GOV.UK — Set up as a sole trader — UTR and trading status

• Companies House — company credit scoring basis

• Federation of Master Builders — buying group and trade support guidance

• FCA — Consumer credit — when arranging customer finance becomes regulated

• trade accounts — overview of trade account basics

• business banking — separating business and personal finances

• material price volatility — managing fluctuating material costs against quoted prices

• vat for trades — reclaiming VAT on merchant purchases