Guides › Home Improvements and Traders › Cancellation Fee or Lost Deposit: Is It Fair?
Cancellation Fee or Lost Deposit: Is It Fair?
If you cancel a contract, a business can usually only keep or charge enough to cover the losses your cancellation actually caused it, such as costs it has already spent or lost profit. Cancellation charges must be a genuine estimate of its loss, non-refundable deposits should be a small percentage of the price, and an unfair term cannot be relied on.
At a Glance
Your Rights
What the rules say, with a link to the official source for each.
Cancellation Charges
CMA Guide on GOV.UK
A business can keep or charge an amount sufficient to cover its actual losses that directly result from your cancellation, which can include costs already incurred or loss of profit. Cancellation charges must be a genuine estimate of the business's direct loss, and it must take reasonable steps to reduce its losses. Non-refundable deposits should only be a small percentage of the total price. A cancellation charge is not fair just because it is in the contract you signed, and businesses cannot rely on unfair terms. source
Time Limits to Know
Miss a deadline and you can lose a right. Check the dates on your own paperwork.
- 14 daysCancel most online, phone or doorstep contractsWithout a fee, if the right applies
Steps to Take
Step 1 of 5
Find the cancellation term in your contract.
Step 2 of 5
Ask the business to explain what losses the charge covers.
Step 3 of 5
Ask whether it has resold the date or reused the materials.
Step 4 of 5
Offer to pay any genuine loss and ask for the rest back.
Step 5 of 5
If you paid by card, ask your card provider for help.
(Tap the numbers to reveal steps)
Where to Go If It Is Not Put Right
Your options, in order, and when each one applies.
The Business
Ask in writing for a breakdown of its losses.
Citizens Advice Consumer Service
Free advice; can pass cases to Trading Standards.
Good to Know
Small things that make your complaint stronger.
Check whether a 14-day cancellation right applied first: if so, you may owe nothing.
Want Help?
If you would like one of our team to look at your problem, our initial case review is free. We cannot guarantee any outcome and we do not give legal advice.
Lead reviewer
Luke Marley
Founder and Lead Reviewer
Luke founded CPUK in 2026 after seeing how hard it is for ordinary people to get problems with companies put right. He oversees our guides and checks them against official sources.
Research by Katie Burt, Co-founder and Operations Lead (17 years in the care sector, including managing services for vulnerable adults), and the CPUK Research Team. Researched with AI-assisted research tools, then checked and corrected by our team.
Last checked: 13 October 2026. We are not paid by the companies we write about. Adverts never affect our guidance. Read our editorial policy.