This is a typical clause in a building contract where the main contractor uses subcontractors for part or all of the construction.
The 'discount' is, to all intents and purposes, the main contractors 'fee' for attending to you while you are on his site.
The retention is intended to encourage subbies to return to site and rectify any defects which occur within a specified time limit. I wouldn't have thought this applies to a builder's clean
Your arithemetic is correct, though it's more usual to round-up, (£1026.00) rather than £1025.64