Should I ask for a deposit or payment upfront, and how do I ask?
The short answer
Yes. If a job costs you money before the client pays, or the client is new, you can ask for payment upfront1: put it in writing with the quote, with a date, and start only when it has cleared. A deposit paid late earns no late-payment interest until the work it pays for is done3, but money due on a finished stage starts earning it the day after its due date3.
England and Wales only. WolfX is software, not a law firm.
What you can add
The same £3,600, asked for two ways
Say you make furniture and a café orders £9,000 of tables and seating. You'll buy £3,100 of timber and board before you start, so you ask for £3,600 up front, 40% of the price. You are not VAT-registered. Way one, a deposit: due 3 July 2026, paid 23 July, 20 days late. Way two, payment for the workshop build: due 14 August 2026, the day the build is finished, paid 3 September, also 20 days late. Interest on way two starts on 15 August 2026, so the rate is 8%6 plus the Bank Rate on 30 June, 3.75%7: 11.75% a year.
- Way one, deposit: interest3£0.00
- Way one, deposit: fixed sum4£0.00
- Way two, stage: interest £3,600 × 11.75% ÷ 365 × 20 days6£23.18
- Way two, stage: fixed sum (debts of £1,000 to £9,999.99)8£70.00
- The difference the ask makes£93.18
The same £3,600, two ways of asking, two answers from the law. The deposit put the cash for the timber in your account before you bought it. The stage payment added £93.18 for being 20 days late, but you funded the whole build first. Had the deposit still been unpaid when you finished the job, interest would start the next day3, and the fixed sum4 with it.
The road ahead
Seven steps. All free.
Step 1: Decide if this job needs one
Ask when you would be out of pocket if they walked away tomorrow: materials you buy for the job, a slot you can't resell, time you can't bill, or bespoke work no one else can use. Ask a new client too. Payment upfront is yours to set as a term1. Skip it for a client who has paid you on short terms for years.
Step 2: Size it to the money at risk
These are rules of thumb, not law. For work led by materials, ask for at least what they cost you. For work led by your time, ask for a share to book the start, then stage the rest. For a retainer, ask for the first month ahead. In the sum below, £3,100 of timber became a £3,600 deposit: the materials, plus £500 to hold the slot.
Step 3: Make the rest due on finished stages
A payment for a finished stage, due on or after the day the stage is finished, is not an advance payment5, so its agreed date counts3. Pick a stage you can point to, like 'workshop build finished'.
A payment due before its work is finished is an advance payment, whatever the quote calls it. If it pays for no particular work, interest starts the day after the whole job is done3. If it pays for a stage, the day after that stage is done5.
Step 4: Ask in writing, with the quote
Agree the terms before the work and put them in writing12. Send the email below with the quote and a deposit invoice. State it as your routine for every new client, with the reason: 'I order the materials when the deposit clears.' A routine says nothing about them.
If they push back, offer a smaller deposit with stages after it, but not below what you would lose if they walked away.
Step 5: Change the ask for a small or big client
Small client: one line in the quote email will do. 'To book your slot I need £400 by 16 October 2026. The rest is due when the job is finished. Tell me if that doesn't suit.'
Big client on purchase orders: if their process rules out paying in advance, don't make a deposit the price of the job. Ask for stage invoices, each due on a finished stage, and for bought-in costs to be invoiced on a date you name. Get both onto the purchase order.
Step 6: Say what it covers, and count the VAT
Say what the deposit pays for, when it comes back and what happens if either side cancels. 'Non-refundable' alone leaves them guessing.
If you charge VAT, it is due on the deposit: 20%11 of £3,600 is £720. The tax point is the date you issue a VAT invoice for it or receive it, whichever comes first9, so mark the deposit invoice 'this is not a VAT invoice'10 and issue the VAT invoice once it is paid.
It stays due if you keep the deposit9. If you refund it, you can reclaim the VAT10 you accounted for in your next return.
Step 7: Start when the money has cleared
Make the start date depend on cleared money, then keep to it. A late deposit earns you no interest until the work it pays for is done, so the start date is your lever. If it slips, say in writing that the start moves with it.
Once you have started, whether you can stop work over unpaid money is a separate question.
A letter you can copy
Quote email asking for a deposit
Send it with the quote to a new client, or to any client when the job costs you money before they pay. Order nothing until the deposit has cleared.
Tap a highlighted gap to see what goes in it.
Send it by email with the quote and the deposit invoice attached, so it is dated. Keep their reply with the quote. The cancellation terms are yours to set, not the law's. Change them to terms you will keep to. For a client who has paid you before, cut the email to the deposit, the date and the start line.
When not to bother
When it isn't worth it
- They have paid you on short terms for years. A client with a clean record doesn't need a deposit, and the ask spends goodwill you already have. Keep to stages and due dates.
- The job is small. On £150 of work a deposit email costs more goodwill than it protects. Invoice when you finish, due in 7 days.
- A big client's process rules out paying in advance. Don't make a deposit the price of the job. Ask for stage invoices due on finished stages, and put the dates on the purchase order.
- The client is a consumer. The law this page rests on covers sales between businesses2. Consumer deposits follow other rules, which this page doesn't cover.
The Wolf's note
A deposit puts cash in your hand before the work, and if it is late it earns no interest until the work is done. A stage payment waits for its stage, then, if it is late, earns interest from the day after its due date. A bigger job can carry both, so say in the quote which pound is which.
Mr. Wolf · the AI inside WolfX
What comes next
Your next move
What payment terms should I put on my invoice?
Fourteen or thirty days, agreed before the work starts.
5 min read · Letter included
Do my terms apply if the client never signed them?
Usually, if the client had them before they said yes.
7 min read · Letter included
When it first goes quiet
Can I stop work if a client doesn't pay?
Yes, in construction, after at least 7 days' notice.
6 min read · Letter included
Don't want to do this yourself?
The Wolf does every step for you. He works out the sums, writes the letters and keeps track of every date. Nothing goes without your yes.