Taking a Deposit as a Tradesperson: Rules and Wording

Taking a deposit as a tradesperson is allowed, but only if the customer agreed to it in writing before you ask for the money. In Sweden the default rule in konsumenttjänstlagen 41 § is that a consumer does not have to pay you anything until the work has been carried out and you have asked for payment. A deposit (handpenning) or advance payment (förskott) is an exception you negotiate into the contract, not a right you get by putting it on an invoice. The UK works the same way in practice: no law bans deposits, but an unagreed one is not owed. So the whole game is in the quote. Agree the amount, tie it to a real cost you can evidence, keep it out of your ROT calculation, and word it so it survives a dispute.

Deposit, advance payment or stage payment — pick the right word

• Deposit (handpenning). A part-payment on signing that counts towards the final price. Not a booking fee, not a penalty. It should represent money you are about to spend on the customer's behalf.
• Advance payment (förskott). Payment before the work is done. Legally the same category, usually a bigger share — and the more you ask for, the more the customer is financing you rather than the job.
• Stage payment (à conto, or a betalningsplan). Payment against work completed to date. The cleanest option beyond a couple of weeks, because each payment is backed by something the customer can see.

Rising material prices are why this matters more in 2026 than it did five years ago. You front more capital per job than you used to, and you often pay your wholesaler on 20 days while the customer pays you on 30. The deposit is where you close that gap — if the wording holds.

When you may ask a consumer for a deposit

Under konsumenttjänstlagen the sequence is: perform, invoice, get paid. Section 41 says the consumer is not obliged to pay until you have carried out the service on request. Section 40 gives them the right to an itemised bill (specificerad räkning) showing the labour and material charged, and they need not pay until they have had one. Both rules start with the words unless otherwise agreed. That is your opening. A deposit works when:

• it is written into the quote before any money changes hands;
• the customer has accepted that quote, ideally with a signature or an e-signature you can date-stamp;
• the amount and the trigger are both stated (on acceptance, on ordering material, on the first day on site); and
• you can explain what the money is for without hesitating.

No law caps the share. What caps it in practice is reasonableness. If a dispute reaches Allmänna reklamationsnämnden (ARN), Sweden's free consumer disputes board, or a UK court applying the Consumer Rights Act 2015, an advance far larger than your actual outlay looks like an unfair term. A deposit matching a supplier order you can produce looks like a business doing normal business. For business-to-business work none of this applies — you and the other company can agree whatever you like.

What Hantverkarformuläret allows

Hantverkarformuläret is the standard Swedish contract for smaller jobs on private homes, produced by Konsumentverket with the building and trade organisations. The nearest English equivalent is a trade-association model contract. Using it puts you on ground both sides recognise.

It does not ban advance payments. It gives you a space for a payment plan and expects you to fill it in, assuming payment follows performance unless you write something else there. Leave it blank and you have agreed to the default: pay on completion, against an itemised bill.

Two things before you reach for it. It is for small jobs: building or substantially extending a house for a consumer is a småhusentreprenad, a different regime (ABS 18 territory) where konsumenttjänstlagen also requires the contractor to provide security to the consumer. And fill in the material split — the form wants labour and material stated separately, you need that split for ROT anyway, and it is the evidence that justifies your deposit.

Size the deposit against actual material spend, not a round number

Most firms ask for 30% or 50% because it sounds like the sort of thing you ask for. Round numbers are what customers argue with, because they look invented. A number derived from your own order sheet is far harder to push back on.

The method: split the quote into labour and material, then split the material into what you can send back and what you cannot. The deposit is the part you cannot send back.

Committed spend: 10 700 ex-VAT. That is your deposit, plus VAT, and the reason fits on one line: the special-order fittings and the equipment hire cannot be returned.

Sense checks worth applying every time:

• Never ask for more than you are committed to. If the deposit exceeds your outlay, you are asking the customer for working capital, and they can tell.
• Ask when you commit, not when you sign. If the special order goes in on day 9, invoice the deposit on day 8.
• Above roughly 30 000 ex-VAT of committed material, use stage payments instead. Big single advances attract scrutiny. A payment plan tied to visible milestones does not.
• Do not round up. Ask for 10 700, not 12 000. The odd number is the proof.

Why an advance payment on ROT work needs extra care

For readers outside Sweden: ROT is the Swedish tax deduction for renovation and repair work on a private home. It is worth 30% of the labour cost, capped per person per year (the ceiling is shared with the RUT deduction for household services, and the amount changes — check the current figure at Skatteverket). The customer pays the reduced price and you claim the rest with a begäran om utbetalning. The UK has no direct equivalent; the closest model is a government rebate paid to you rather than the customer.

Three consequences for deposits:

• ROT does not touch material. Only labour qualifies. Since a well-sized deposit is a material deposit, its ROT-eligible share is zero and the customer pays 100% of it. Say so in the quote, because a customer seeing net-of-ROT totals everywhere else will assume the deposit is net too.
• You cannot claim before the work is done and paid for. The claim comes after the job is carried out and the customer has paid their share. So do not knock 30% off an advance on the strength of labour you have not performed. If the job is then cancelled, you have discounted a customer for work that never happened.
• The deduction can be refused. Wrong property, ceiling used up by another trade, customer not the owner — the shortfall lands on the customer. Keep the deposit clean of ROT and that stays out of your cash position.

The safe pattern: deposit = committed material, gross, no ROT. Apply the deduction to the labour on the final invoice, where it belongs. OdinTask applies ROT to the labour lines only and shows the customer the net figure, so a deposit line cannot silently pick up a 30% discount it was never entitled to.

The 14-day cancellation trap that eats deposits

This is the one that catches good firms. If you signed the quote at the customer's kitchen table, or over email and phone without ever meeting, that is an off-premises or distance contract. Under Swedish distansavtalslagen — and near-identically under the UK's Consumer Contracts Regulations 2013 — the consumer has 14 days to cancel for no reason at all. If they cancel inside that window, you refund the deposit in full. All of it. Even if the fittings are already on your van.

The fix is two lines of paperwork:

• Tell them the right exists, in writing, at the point of signing. If you do not, the cancellation window can extend by up to a year — so a deposit you took last spring is still clawable.
• Get an express request to start early. If the customer asks you in writing to begin, or to order material, during those 14 days and then cancels, they owe you a proportionate amount for what you have done and committed. Without that request, they owe you nothing.

A tick box on the quote acceptance page does both. It costs nothing and it is the difference between a refunded deposit and a paid one.

How to word it in the quote so it is not disputed later

Short, specific, stated as a fact rather than a threat. Something like:

Payment plan. On acceptance you pay a deposit of 13 375 SEK including VAT (10 700 ex-VAT). It covers material ordered to your specification and equipment hire, both non-returnable, and is set off in full against the final invoice. No ROT deduction applies to the deposit, as ROT covers labour only. The balance is invoiced on completion with 30 days to pay, and shows the ROT deduction on the labour. If you cancel before we start, the deposit is refunded less any cost we have already committed and can evidence with a supplier order.

Why each part earns its place:

• A number, not a percentage. Percentages invite negotiation. A figure with a reason attached invites a yes.
• What it is for, and set off against the final invoice. Removes the suspicion that you need the money to survive the month, and makes clear it is not an extra charge.
• The ROT sentence. Prevents the most common deposit argument on Swedish domestic work.
• The refund line. Under konsumenttjänstlagen 42 § the customer may cancel before the work is finished, and you are entitled to compensation for what you have done and lost — but you have to show it. A flat non-refundable clause is not a magic word: it can be set aside as unfair, and ARN will look at your actual costs regardless. Promising an evidenced deduction is truer and stronger.

One more thing for the back office: an advance payment is not revenue yet. It sits as a liability until you have earned it — the BAS chart of accounts has account 2420, Förskott från kunder, for exactly this. VAT does not wait. In Sweden it falls due in the period you receive the payment; in the UK the tax point is the earlier of payment or invoice. Issue a proper VAT invoice for the deposit, declare the VAT in that period, and remember that a fifth of the money that just landed is not yours.

A workable default

• Few days, stock material: no deposit. Invoice on completion. It closes faster and you look easy to deal with.
• Special-order or non-returnable material: deposit = that committed spend, gross of ROT, invoiced when you place the order.
• Over two weeks, or over roughly 30 000 of material: stage payments against milestones.
• Any consumer job signed away from your premises: cancellation notice plus an express request to start, in writing.

Deposits are not a trust problem. They are an evidence problem. If your quote shows the labour and material split, names the committed cost, and keeps ROT where it belongs, almost nobody argues — and the ones who do, you answer with a supplier order rather than an opinion.

If your quotes are built in a spreadsheet, that split is manual every time, and manual is where ROT ends up on the wrong line. OdinTask separates labour and material in the quote, applies ROT to the labour only, and takes the customer's e-signature with an audit trail. Start a 14-day free trial, or see the pricing page.