Last checked October 2026 · by the PaySorted team
Is taking a deposit legal?
Yes. No law stops you asking for a deposit. What the law controls is fairness. For jobs with householders, the Consumer Rights Act says a term can be unfair if you keep money when the customer cancels without a fair reason, or charge "a disproportionately high sum". The Competition and Markets Authority says a deposit should only secure the booking and be a small part of the total; larger upfront payments should reflect what you've actually spent.
Citizens Advice tells customers not to pay more than 25% upfront, so asking for more is likely to put people off.
How to take a deposit fairly
- Tie it to real costs: materials you have to order, bespoke items, or booking your time.
- Put it in writing on the quote: the amount, what it covers, and what happens if either of you cancels.
- Give a receipt — or better, send a deposit invoice with a card payment link.
- Take it off the final invoice and show it clearly ("Less deposit paid").
The 14-day cancellation rule
If you agree the job at the customer's home (or by phone, email or online) rather than at your own premises, the customer usually has 14 days to cancel and must be told this in writing before they agree. Failing to give that information for a job agreed in their home is a criminal offence, and the cancellation period can stretch to 12 months.
- If they cancel in the 14 days, you must refund everything they've paid, deposit included, within 14 days.
- You can't start work in the 14 days unless they ask you to in writing (an email or text is fine). If they then cancel, they pay for the work done so far.
- Urgent repairs they called you out for, and goods made to their specification, are exceptions.
Stage payments for bigger jobs
On longer jobs, agree stage payments at the start and write them on the quote. A typical extension might be:
| Stage | Payment |
|---|---|
| Booking deposit (materials ordered) | 10–20% |
| Foundations and walls up | 25% |
| Roof on, watertight | 25% |
| First fix complete | 20% |
| Completion and sign-off | Balance |
Link each payment to a clear, visible milestone, not a date, so there's no argument about whether it's due.
For commercial and subcontract work, the Construction Act gives you a right to stage payments on any job expected to last 45 days or more. See payment notices and pay-less notices. That right doesn't cover a contract directly with a homeowner, which is why writing the stages into the quote matters.
Doing it in PaySorted
On PaySorted's Pro and Business plans you can ask for a 10%, 25% or 50% deposit right on the quote, and the quote tells the customer it's payable when they accept. Once they accept, one tap creates the deposit invoice with a Pay now button. When the job's done, the final invoice takes off the deposit automatically ("Less deposit paid"), and if you're a CIS subcontractor the deposit is split into labour and materials so the deduction is right. For longer jobs, send each stage as its own invoice — and if any payment is late, polite reminders go out automatically and stop the moment it's paid.
General information (checked October 2026), not legal advice. The cancellation rules come from the Consumer Contracts Regulations 2013; Citizens Advice and the CMA publish guidance for traders.
Common questions
How much deposit can a builder ask for?
There's no fixed legal limit, but it should be fair and linked to real upfront costs. Citizens Advice tells customers not to pay more than 25% upfront.
Do I have to refund a deposit if the customer cancels?
If the job was agreed at their home or remotely and they cancel within the 14-day cancellation period, yes, in full within 14 days. After that, it depends on your terms and the costs you've genuinely incurred.
Can I start work during the 14-day cooling-off period?
Only if the customer asks you to in writing. If they then cancel, they pay for the work done up to that point.
Am I entitled to stage payments?
On construction contracts expected to last 45 days or more, the Construction Act gives a right to stage payments, but not for contracts directly with a homeowner. Agree stages in writing either way.