Guides · Updated 2026-10-15

Payment terms for trades: deposits, stages and due dates

Most payment problems start with the quote. If the customer doesn't know when they're expected to pay, how much and how, every invoice becomes a negotiation. Clear payment terms, agreed before you start, fix most of that. This guide covers deposits, stage payments and due dates, and the parts of UK law that affect them. Sources were checked on GOV.UK and legislation.gov.uk on 15 October 2026.

Put the terms on the quote

Write your terms on the quote and repeat them on every invoice:

• the deposit, if any, and when it's due
• stage payments and what triggers each one
• the final payment date, for example "within 14 days of the invoice"
• how to pay (bank transfer details, card link)
• what happens if a business customer pays late

If you don't agree a payment date with a business customer, the law sets one: payment is late 30 days after the customer gets the invoice or you deliver the work, whichever is later. Agreed terms between businesses should usually be no more than 60 days, or 30 days for public authorities (GOV.UK).

Deposits

A deposit covers materials and shows the customer is committed. There's no single legal rule on deposit size for trades; it's a matter of what you agree. Common practice is to tie the deposit to the materials you'll buy for that job, and to say on the quote whether it's refundable if the customer cancels.

If you agree the contract in the customer's home, you must tell them they can cancel within 14 days; if you don't, they can cancel for up to 12 months. Contracts of £42 or less are exempt (GOV.UK). Make sure your deposit terms fit with that.

Stage payments on longer jobs

For longer jobs, stage payments keep cash flowing and reduce your risk. Link each stage to something both sides can see: strip-out finished, first fix done, plastering complete.

For construction contracts covered by the Housing Grants, Construction and Regeneration Act 1996, a party is entitled to stage or periodic payments unless the work is specified or agreed to take less than 45 days (legislation.gov.uk, section 109). That part of the Act doesn't apply to contracts with a residential occupier, which covers most work for homeowners on their own home (section 106). So for domestic jobs, stage payments are whatever you agree in writing.

What homeowners can expect from you

For consumers, the Consumer Rights Act 2015 treats every service contract as including a term that the work is done with reasonable care and skill (section 49). If the price isn't fixed in the contract, the customer must pay a reasonable price, and no more (section 51). If no time is fixed, the work must be done within a reasonable time (section 52). A written quote with a fixed price and rough timings avoids arguments about what's "reasonable".

Business customers who pay late

If another business pays late, you can add statutory interest of 8% plus the Bank of England base rate, which is 11.75% a year for debts that went late in 2026, plus a fixed sum of £40, £70 or £100 depending on the debt (GOV.UK). Saying so in your terms often speeds payment up on its own. Work it out with the late payment interest calculator, and see how to chase a late payment for the steps.

Make paying easy

Many late payments are friction: no bank details on the invoice, or no way to pay by card. Invoicing apps can add payment links and send reminders automatically; compare them on the invoicing tools page. Price the job properly first with the quote and VAT calculator.

If material prices might move before you order, add a fair price-change clause with the price-change clause generator.

For building the price itself, see how to price a job.

FAQ

What payment terms should a tradesperson use?

Common terms are a deposit for materials, stage payments on longer jobs, and the balance within a set number of days of the invoice. Whatever you choose, put it in writing on the quote.

What's the maximum payment term for business customers?

GOV.UK says agreed terms between businesses should usually be no more than 60 days, or 30 days for public authorities. With no agreed date, payment is late after 30 days.

Am I entitled to stage payments?

Under construction contracts covered by the 1996 Act, yes, unless the work is set to take less than 45 days. That part doesn't apply to work for a homeowner on their own home, where stage payments depend on what you agree.

Can I charge a homeowner late payment interest?

Not under the commercial late payment rules, which cover business-to-business debts. Set out what happens in your terms.

Is this legal advice?

No. It summarises GOV.UK and legislation.gov.uk, checked 15 October 2026. Get advice for large contracts.