Main contractor: “We always do 5% retention, 2.5% at PC, 2.5% at 12 months.” You quoted a tight number with no float. That 5% is your van for a year. Retention is not a moral failing. It is a term. Put it on the quote or walk.
What to write
| Term | Make it specific |
|---|---|
| Percent | 5% of each invoice, or 5% of the job — say which |
| First release | Practical completion / handover, defined |
| Second release | End of defects period, date or months |
| What it is not | Not a discount, not a snag they invent at month 11 |
Worked: job £40,000. Retention 5% = £2,000 sitting with them. If your margin was £2,400, you just lent them most of the profit until next spring. Either the rate includes that wait, or you do not sign it.
Retention: 5% of certified sums. 2.5% released on practical completion of our works; 2.5% released 6 months after, subject to defects we caused. Retention is not a discount on the quoted figure.
Domestic bathrooms rarely need retention. If a homeowner wants to “hold 10% until we’re happy,” that is a deposit in reverse with no end date. Use a snag visit and a defined callback instead. This is general information, not legal advice on JCT or other forms.
What people miss
Agreeing retention after you priced tight. Reprice, or say no. 5% of a thin job is a loss.
No release trigger. “When we’re happy” is never. Name completion and a month count.
Letting them keep it for their other trades’ defects. Your retention is for your works. Write that.
Forgetting it on the invoice. Show gross, retention held, amount due now — or you will chase the wrong figure.
Related guides
FAQ
- Is 5% normal?
- On some building contracts, yes. On a one-week domestic job, no. Match the job, not a forum.
- Can I refuse retention?
- Yes. Then they hire someone who priced it in. Your call.
- VAT on retention?
- Follow how you invoice the rest of the job. Do not invent a special VAT story for the held slice. Not tax advice.
- They never pay the second half.
- Diary the release date when you invoice. Chase it like any overdue invoice.
