How much deposit can a builder ask for? UK rules and the CPA stance

A mate of mine quoted a kitchen install last spring, £9,000 all in. The customer was keen, shook on it, then asked what deposit he wanted. He'd never really thought about it. Pulled a number out of the air and said half up front. The customer's face dropped, and you could watch the trust go with it. He ended up doing the job for a £1,500 deposit and chasing the rest for weeks.

Plenty of trades have the opposite problem too. Take too little, order three grand of materials on your own card, and you're the bank again.

So how much deposit can a builder actually ask for, what do the rules say, and where's the line that turns a fair deposit into a red flag? Here's the plain version.

Is there a legal limit on builder deposits?

No. There is no Act of Parliament that sets a maximum deposit, no percentage written into law, no regulator that caps the number. A deposit is simply part of the contract you agree with your customer. Whatever you both sign up to, in writing, is the deposit.

That cuts both ways. You can ask for what you like, but the customer can refuse, and an unreasonable demand either costs you the job or poisons the relationship before you've turned up. The freedom to set any number is not the same as the freedom to set a sensible one.

The laws that do bite are general contract law, the Consumer Rights Act 2015 on the quality-of-work side, and, for any deal struck in the customer's home, the Consumer Contracts Regulations 2013. None of them cap the deposit. What they do is decide what happens to that deposit if things go sideways, which is the part most trades never read until it's too late.

So what's a reasonable deposit?

Start with what a deposit is for. It's there to cover the kit you have to lay out before a single hour gets billed. The suite, the units, the cable, the membrane, the tiles. It is not there to pay your wages for work you haven't done yet.

Frame it that way and the number explains itself. You ask for enough to cover the materials you're ordering on the customer's behalf, and not a penny that pays you for labour before you've earned it.

In real money, that lands most domestic jobs somewhere between 5% and 25% of the total. Citizens Advice and the main trade bodies treat anything well above that as a warning sign. A demand for 50% up front, or full payment before work starts, is the sort of thing that gets a builder talked about in the wrong WhatsApp groups.

When a bigger deposit is fair

There's one honest exception. Bespoke, made-to-order items that the supplier won't refund: a specced kitchen, made-to-measure windows, a one-off staircase. If you're putting a non-refundable order in with a manufacturer, it's fair to ask the customer to cover it before you commit your own money.

The trick is to show your working. Put the supplier quote in front of the customer and tie the deposit to it. A deposit backed by a receipt is easy to defend and impossible to argue with. A round number plucked from the air is neither.

The CPA stance on deposits

The clearest published benchmark on this comes from the Consumer Protection Association, the CPA. It's an FCA-regulated body that's been protecting home-improvement customers for around 30 years, and its deposit protection scheme spells out a number worth knowing.

The CPA scheme covers a customer's deposit up to 25% of the price of the works or £7,500, whichever is lower, for up to 120 days or until the work starts. Read that the right way and it's a gift to you as a trade. A recognised consumer body has effectively published the figure it considers protectable: 25%.

Ask for a deposit at or under that line and you're in step with the most widely recognised standard in the sector. Ask for more and even the protection schemes won't cover the excess, which quietly tells the customer something you'd rather it didn't.

If you run a bigger firm, becoming a CPA or TrustMark member and offering deposit protection or an insurance-backed guarantee is a proper selling point. A customer hands over a 25% deposit far more happily when they know it's insured if your firm stopped trading halfway through. It turns the deposit conversation from a worry into a reassurance.

The cancellation trap most trades walk into

This is the one that catches people out, and it's got nothing to do with the size of the deposit.

If you agree a job in the customer's home, at the kitchen table, on the doorstep, anywhere that isn't your own business premises, the deal is an "off-premises contract" under the Consumer Contracts Regulations 2013. That gives the customer 14 days to cancel, no reason needed. Almost every domestic quote you win is agreed exactly like this.

Two things follow from it:

• You must give the customer written notice of their right to cancel, before or at the point the contract is made. A clause in your terms plus a cancellation form does the job.
• If you skip that notice, the 14-day window doesn't just lapse. It extends by up to 12 months. A customer who paid a deposit in March could, in theory, cancel the following February and ask for it all back, because you never told them they had the right to cancel in the first place.

Starting work inside the 14 days

If the customer wants you to crack on before the 14 days are up, that's allowed, but you need their request in writing. Get that, and if they cancel partway through you can keep a proportionate amount for the work done and the materials bought. Skip it, and you're exposed: you could be made to hand the deposit back even after you've started.

Worked example: structuring the deposit on an £8,000 bathroom

Numbers make this concrete. Say you've quoted a full bathroom refit at £8,000, materials and labour included.

Here's the kit you have to order before day one:

• Bath, basin and toilet suite: £650
• Wall and floor tiles: £480
• Vanity unit and worktop: £320
• Brassware, taps and shower valve: £290
• Adhesive, grout, boards and fixings: £260
• Total materials upfront: £2,000

A £2,000 deposit is exactly 25% of the job. It covers every penny of the materials you've laid out, it sits right on the CPA's protection ceiling, and you can put the supplier order in front of the customer to back it up. Nobody can call that unfair.

Then you split the rest into stage payments tied to milestones, not dates:

• Deposit on order, covers materials: £2,000 (25%)
• First fix done, walls boarded and ready to tile: £3,000 (37.5%)
• Completion and customer sign-off: £3,000 (37.5%)

The customer never pays for work that hasn't happened. You're never more than a few days out of pocket. And the final payment is small enough that a customer clears it to get you off site, but big enough that you're motivated to finish the job properly.

Compare that to the "half up front" approach. On the same job, a £4,000 deposit means the customer is funding two days of your labour before you've lifted a single tile. If anything goes wrong, they're chasing you, and they know it. The 25%-plus-stages structure gets you the same cashflow with none of the suspicion.

What NOT to do (the 5 common mistakes)

1. Don't ask for 50% or more up front on a standard domestic job. It reads as either cashflow trouble or a runner in the making. The customer's guard goes up and the goodwill comes down, and you've not even started.
2. Don't take a deposit with no paperwork. A bank transfer with nothing in writing is a dispute waiting to happen. Issue a deposit invoice that names the job, the agreed total, the deposit amount, and exactly what it covers.
3. Don't agree the job at the kitchen table and forget the cancellation notice. Miss it and the customer's 14-day right to cancel stretches to 12 months. Put the notice in your terms and have them sign before any money moves.
4. Don't spend the deposit before you've bought the materials. That money is the customer's, set aside for their materials, until those materials are on order. Treating it as early wages is how you end up funding this job out of the deposit for the next one.
5. Don't let the deposit be the only thing protecting you. A deposit covers materials. A clear quote, written terms, and stage payments cover everything else. Lean on all of them, not just the cash up front.

The simple version

If you remember one thing, make it this. A fair deposit covers your materials and nothing more, it sits at or under 25% of the job, and it's backed by a receipt and a written quote the customer agreed to. Do that and the deposit conversation stops being awkward. You're not asking for a favour. You're asking the customer to cover the kit their own job needs, which is about as reasonable a request as there is.

Get the quote and the terms right at the start and the deposit looks after itself. The TradeStash app builds the deposit line and the stage payments straight into the quote, so the customer sees the whole payment plan before they say yes. No awkward maths on the doorstep, no number plucked from the air.