Deposits and staged payments: what is reasonable to be asked for
Two absolute answers get repeated everywhere and both are wrong. Here is what the money is actually for, and how to structure the rest of it.
A deposit is reasonable when it pays for something identifiable that has to be bought or booked before anyone starts: your materials, the scaffold, the skip. It is not reasonable as payment for labour nobody has done yet. Ask what the money buys, get the answer in writing, and pay it by credit card.
The short version
- "Never pay a deposit" and "everyone takes half up front" are both wrong. What decides it is whether the sum is tied to something ordered or booked for your job.
- A deposit buys materials and bookings. It does not buy labour that has not happened.
- Put part of the money on a credit card. Section 75 of the Consumer Credit Act 1974 makes the card issuer jointly liable with the contractor. A transfer carries nothing like it.
- Tie every later payment to a stage you could check from the garden, never to a date, and hold a retention until the site is clear.
- A day rate is honest for work nobody can measure until it is opened up. For anything measurable, a fixed price is.
Start here
What a deposit is actually paying for
Take the two absolutes off the table. Never pay a deposit is wrong, and everyone takes half up front is wrong. What decides it is whether the money is tied to something genuinely ordered or booked for your job.
We ask for deposits on some work, so read this knowing that. On a re-roof the material order goes in before the first tile comes off: natural slate, a tile nobody stocks locally, made-to-order ridge components, rooflights cut to your opening, lead in quantity. Merchants want paying up front on a special order, the scaffold is booked to a date and the skip with it, and all of that leaves the contractor's account before day one.
So ask what the money buys and expect a real answer: which tile, how many, from which merchant, ordered when. If it names goods, it is a materials deposit. If the answer is that this is just how it is done, it is a loan. Either way it is not paying for labour.
It also means different things on different jobs. On a re-roof the material order is a large share of the whole. On a plastering job there is little to order in advance, so the same request has much less behind it, and on a half-day repair nobody should be asking for money at all.
Citizens Advice suggests paying nothing up front where you can, and offering to buy the materials yourself where a deposit is wanted for them. No straight contractor should mind that: you own the goods and the receipt is in your name. They also say not to agree to more than 25%, which is guidance rather than law but a sensible ceiling to carry.
Warning signs
The deposit request that should worry you
A deposit request should worry you when it wants a large sum before anything is ordered or written down, leans on urgency, asks for cash or names a personal account. The shape of the request tells you more than the size of it.
- A large sum before anything has been ordered, and before anything in writing says what would be. What a quote should list is what a deposit attaches to.
- Money wanted before there is anything in writing at all. A verbal agreement is still a contract, but it cannot describe a roof.
- Urgency. A figure good only today, a crew that happens to be in the area, a decision wanted on the doorstep. If it was agreed at your door there may also be a right to cancel.
- Cash, and the discount that comes with it.
- A personal account rather than the business one. If the quote is from a limited company, the money belongs in that company's account, in that name.
A cash discount is not automatically dishonest, and that is worth saying plainly. Card processing costs a small firm money and cash clears the same day. The point is what you hand back. Cash leaves no trail, and it takes the section 75 route below off the table completely, so the discount has a price on it.
Before the money moves. Check the account name matches the name on the quote. A transfer sent to the wrong account is close to unrecoverable, and a company number takes a minute to look up. If the two names are different entities, ask why before you press send.
Card protection
Section 75 of the Consumer Credit Act 1974
Pay part of the job on a credit card. It is the most useful thing on this page. Where a purchase is made with a credit card, section 75 of the Consumer Credit Act 1974 makes the card issuer jointly and severally liable with the trader for misrepresentation or breach of contract.
So if the work is not done, or is not what was described, the claim can be brought against the card company as well as against the contractor. The card company is still there when the contractor is not.
Two limits sit in the section. The cash price has to be more than £100, and not more than £30,000. Both figures are written into the legislation itself, so a job priced above the upper one falls outside the section altogether.
The whole job does not have to go on the card. A section 75 claim is a claim for the breach of contract, not for the sum that happened to be paid by card, so paying part of a qualifying job on a credit card can protect the whole contract price. Putting the deposit on the card and settling the rest by transfer is about the cheapest protection a homeowner can get.
Debit cards are not covered by section 75. The nearest equivalent is chargeback, a card scheme rule and not a statutory right, which runs to a time limit and is decided by the bank instead of being owed to you. Worth asking about, and not the same protection.
Some small firms do not take cards at all, which is not a warning sign in itself, so ask early, not at the moment of paying. All of this is a general explanation of the section, not legal advice on your own contract.
Paying as it goes
Tie every stage to something you can see
Tie each payment to a completed milestone rather than to a date. A date-based schedule pays for the calendar. A milestone schedule pays for work, and on a re-roof the milestones write themselves.
- Scaffold up and signed off.
- Strip complete and the old covering off site.
- Felt and batten complete, the last stage you see before it is covered.
- Covering complete, including ridge, hips, verges and flashings.
- Scaffold struck, the site cleared and the snagging done.
The test for each is whether you could stand in the garden and satisfy yourself it has happened. If you could not, it is a date with a description attached. Never pay for a stage that has not happened.
Hold a retention. A modest final sum kept back until the scaffold is gone, the site is clear and the snags are done is normal, and it is the only leverage that survives to the end of a job. Agree it in the quote, because in week three it is a row and at the start it is a line item.
Staged payments are not something to be talked out of a customer, either. A month-long job with no interim payment means somebody funding your materials and your wages out of their own pocket, and that is how small firms end up pulling crews onto whichever site paid last.
Two things sit alongside the schedule. Scaffold is hired by the week, so how many weeks are allowed and who pays for the extra ones belongs in the quote before the first payment. And a change of scope once the roof is open is a variation, priced in writing before the work is done rather than on the final invoice. Whether the figures carry tax is separate again.
Two ways to price it
Day rate or fixed price, and which is honest when
Neither is honest on its own. The difference is who carries the risk of the job taking longer than anyone thought. A fixed price moves it to the contractor: three days over the allowance and those days are theirs, which is why the possibility has been priced in. A day rate moves it to you.
So a day rate is genuinely the honest answer where the extent of the work cannot be known until it is opened up. Chasing a leak with no obvious source, opening up suspected rot, finding out what is happening behind render. Nobody can put a firm number on those without guessing.
A fixed price is honest wherever the scope can be measured, from the ground or from a survey, which covers nearly every re-roof, full repoint and new flat roof. The tell that a day rate is dodging the pricing is that it turns up on work anyone could have measured. Area, pitch, valley count, chimneys and access are all countable from the pavement.
Where a day rate is right it still needs a stopping point. Agree a cap or a review point, a number of days after which work stops and gets re-priced against what has been found. Ask for that, because it is the real protection. Scaffold makes it urgent, because hire runs on the calendar whether anyone is standing on it or not.
| Fixed price | Day rate | |
|---|---|---|
| Who carries the overrun | The contractor, who has priced the possibility in. | You, with no ceiling unless one is agreed. |
| What must be stated | The scope in words, what is excluded, the scaffold weeks, the tax position. | The rate, how many operatives, the hours in a day, what sits on top. |
| When it is honest | Wherever the work can be measured from the ground or a survey. | Where the extent cannot be known until it is opened up. |
| The warning sign | One figure with no description of the work behind it. | Offered for work anybody could have measured beforehand. |
| What to ask for | A written scope, and how a variation gets priced. | A cap or a review point at which work stops. |
Where no price was fixed, the Consumer Rights Act 2015 says the consumer pays a reasonable price for the service, and no more, and where no time was fixed the work has to be done within a reasonable time. Neither is as good as writing the number down.
If it goes wrong
You paid a deposit and nobody came back
- Put it in writing first. Short and factual: what was agreed, what was paid, and a date by which you expect work to start or the money back. That letter is what turns the reasonable time rule above into a deadline.
- Claim under section 75 if any of the money went on a credit card. Contact the card issuer rather than the contractor, say it is a section 75 claim for breach of contract, and send the quote, the receipt and the letter with it.
- Report it. Consumers cannot approach Trading Standards directly. The Citizens Advice consumer helpline is 0808 223 1133 and it passes reports on to Trading Standards, which is how a pattern about one trader gets built. Do it even if the money comes back another way.
- Then the small claims track. A money claim is designed to be brought without a solicitor. Check who you are suing: if the quote came from a limited company the claim is against that company.
All four are easier if the quote, the receipts and the messages sit in one folder from the day the work is agreed. Every route turns on showing what was agreed and paid.
Next
What to do next
- Ask what the deposit buys, itemised: which materials, what quantities, ordered when and from whom.
- Offer to buy the materials yourself. If that is taken up there may be no deposit.
- Get the payment schedule into the quote, every stage described as work you can see, and agree the retention at the same time.
- Pay by credit card where the job qualifies and the contractor takes them.
- Check the account name against the name on the quote before any transfer leaves.
None of that is adversarial, and a contractor who has thought about your job will have the answers already. What each line of a quote should say is a list of its own, and if the totals still refuse to line up, that is usually scope rather than mischief.
If you want somebody to look at the job before any money moves, Thomas comes out and prices it himself, and both the site visit and the written itemised quote are free. What we do is on the roofing page, and you can ask for a quote or get in touch.
Questions
Common questions
How much deposit should I pay a builder?
No law sets how much deposit you should pay a builder. Citizens Advice suggests pushing it down as far as it will go and not agreeing to more than 25%, but the better test is whether the sum matches something that has actually been ordered or booked for your job: materials, the scaffold, the skip. A deposit should not be paying for labour nobody has done.
Is it normal for a builder to ask for 50% up front?
It is not a norm and it is not unlawful. On most domestic work, half the money before anything happens is more than the materials and bookings can account for, so ask what the sum buys, itemised. If the answer does not name goods that have been ordered, the request is for working capital, not for your job.
Does paying a deposit by credit card protect the whole job?
On a qualifying purchase, yes. Under section 75 of the Consumer Credit Act 1974 the card issuer is jointly and severally liable with the trader for misrepresentation or breach of contract, and the claim is for the breach, not for the amount put on the card. The cash price has to be more than £100 and not more than £30,000. Debit cards are not covered.
Should I pay a builder in cash?
A cash discount is not automatically dishonest, because card processing costs a small firm money and cash clears immediately. But cash leaves no trail and removes the section 75 route entirely, so the discount has a cost attached. On a job of any size the protection is usually worth more than the discount is.
When is a day rate better than a fixed price?
When the extent of the work cannot be known until it is opened up: chasing a leak with no obvious source, opening up suspected rot, or investigating behind render. For anything measurable from the ground or a survey, a fixed price is the honest way to price it, because it puts the overrun on the contractor. On a day rate, agree a cap or a review point in advance.
Read next
Related advice
The guides below pick up where this one leaves off, and the roofing page covers the work itself and the places we cover, if you would rather have the job looked at.
Who wrote this
Thomas Hannen
Thomas owns Bournemouth Roofing & Building and prices every job himself instead of sending somebody else. The company is Bournemouth Roofing & Building Ltd, number 15471719, registered in England and Wales. If you want to talk something through before you commit to anything, the site visit and the written itemised quote are both free.
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