Contents15
- Why “non-refundable” is not a magic word
- What UK law actually looks for
- Deposit vs advance payment vs cancellation charge
- A stepped policy that works for a small house
- Direct vs OTA: same house, two rulebooks
- No-shows, re-lets, and chargebacks
- Checklist before you publish
- FAQ
- Can a UK B&B keep a non-refundable deposit?
- What is a fair cancellation policy for a guest house or small hotel?
- Do OTA rules override my website terms?
- Can I charge 100% for a no-show?
- Should deposits include VAT?
- How do I take deposits without scaring direct bookers?
- Where Stayvieo fits
A B&B cancellation policy in the UK is only as strong as it is fair. Writing “non-refundable” on your website or Booking.com listing does not automatically let you keep a guest’s money if they cancel. Under the Consumer Rights Act 2015, terms that let you keep a disproportionately high sum — or treat every cancellation the same regardless of timing or whether you re-let the room — can be challenged. Guests know this; card chargeback teams know this.
This is how to write a policy you can enforce: what the law is looking for, how deposits differ from cancellation charges, a stepped schedule for a small house, and how to keep direct and OTA wording in step. It is general information, not legal advice. If a dispute is already live, use a solicitor or the Citizens Advice route — not a blog.
Still choosing how guests pay? See payments and booking engines for a B&B website. For what commissioned bookings really cost, read direct bookings vs OTA commission.
Why “non-refundable” is not a magic word
Owners reach for blanket wording because the diary is small and a late cancel hurts. That instinct is rational. The problem is the wording.
The Competition and Markets Authority has told the holiday and tourism sector plainly: you may keep part of a deposit or charge a cancellation fee, but what you keep must be in proportion to what you are actually losing. A large upfront payment with no link to real loss is the sort of term that looks unfair. Clicking “I agree” does not repair an unfair term.
For a five-room guest house the practical risk is rarely a courtroom. It is a chargeback, a lasting review, and an afternoon of email when you should be turning rooms. A fair policy shortens those fights.
What UK law actually looks for
You do not need to recite statutes to guests. You do need terms that survive a fairness test:
Transparency. Deposit amount, balance due date, and cancellation consequences must be visible before payment.
Proportion. Seven months out is not the same loss as 6pm the night before. Your schedule should say so.
Mitigation. If you re-let at a similar rate, your loss shrinks. Keeping 100% after a successful re-let is what guests push hardest against.
Balance if you cancel. One-sided “we keep everything / you get nothing if we cancel” clauses are a familiar unfair-terms red flag under the Consumer Rights Act framework (including greylist examples on disproportionate cancellation sums).
CMA commentary on holiday deposits also treats deposits, as a general rule, as a small percentage of the total. A 100% “deposit” taken at booking is usually an advance payment with the wrong name.
Deposit vs advance payment vs cancellation charge
Tool | What it is | Fair-use pattern for a small house |
|---|---|---|
Deposit | Modest sum to reserve dates | Often 10–30% or one night; refundable on a clear schedule |
Advance payment | Larger early slice of the total | Common for peaks; refunds follow loss bands by date |
Cancellation charge | Amount due on cancel (often taken from sums already paid) | Rising % or nights as arrival nears; re-let reduces what you keep |
Calling a full prepayment a “non-refundable deposit” confuses guests and weakens your position. Name it as payment in advance, with a cancellation schedule attached.
A stepped policy that works for a small house
Adjust percentages to how fast your rooms re-sell. A rural February midweek is not Canterbury in July.
Example: six-room B&B, average stay £180
Guest cancels… | You keep (if not re-let) | If you re-let at a similar rate |
|---|---|---|
More than 28 days out | Deposit only (e.g. £40) | Refund deposit minus a small admin fee stated upfront |
14–28 days | 50% of stay | Keep shortfall vs new booking + stated admin |
7–13 days | 75% of stay | Same: shortfall + admin |
Under 7 days or no-show | 100% of stay | Refund difference after documented costs if re-let |
Publish the table on the site, repeat it in confirmation emails, and use the same words on the phone. Inconsistent website / OTA / email wording is how small hotels lose disputes.
If your system allows, offer a flexible rate and a firmer prepaid rate. Guests who need flexibility pay for it; guests who want the lower tariff accept firmer terms. That beats one blunt “non-refundable” hammer.
Direct vs OTA: same house, two rulebooks
Your direct booking path is under your control. OTA listings are not fully under your control — platforms apply their own guest flows.
Align substance: free-cancel windows, deposit size and no-show treatment should not shock someone who found you on an OTA then booked direct.
Expect process differences: OTAs may mediate; direct settles via your own card payments.
Never promise a free change by email if the listing said otherwise. Emails get screenshotted.
A channel manager keeps rates and availability in step; it will not rewrite your legal wording. Policy hygiene stays an owner job.
No-shows, re-lets, and chargebacks
No-shows are closest to a full loss when the room stays empty — if the guest had clear notice.
Define no-show (for example no arrival by 6pm and no contact). Put a phone number in your pre-arrival sequence.
If you re-let after releasing the room, say in the policy that you refund what you recover minus stated costs. That reads as fair and softens chargebacks.
Prefer charging the deposit at booking over an unexplained card hold. Keep a timestamped copy of the terms the guest accepted. Make the card statement show your property name.
Checklist before you publish
Replace “non-refundable in all circumstances” with a dated schedule.
Keep everyday deposits to a small percentage or one night unless the stay is short.
Say what happens if you cancel or change the booking.
Say what happens if you re-let.
Mirror the schedule on website, confirmation email and OTA policy fields.
Offer a flexible rate option.
Ask your accountant how kept deposits sit in turnover for the VAT threshold.
Re-read the terms on a phone. If you would not accept them as a guest, fix fairness before you harden the threats.
FAQ
Can a UK B&B keep a non-refundable deposit?
Only if the amount is fair and proportionate to the loss from that cancellation. Blanket “non-refundable in every case” wording — especially after a re-let — is high risk under UK consumer-law fairness tests.
What is a fair cancellation policy for a guest house or small hotel?
A stepped schedule: lower retention far from arrival, higher close in or on no-show, with an explicit re-let rule. Publish it before payment. Exact bands depend on how quickly your rooms re-sell.
Do OTA rules override my website terms?
For OTA-booked stays, the platform’s guest process usually leads. Keep substance consistent and policy fields accurate. Direct bookings follow the terms accepted on your site.
Can I charge 100% for a no-show?
More defensible if the room stayed empty and notice was clear. After a re-let, keeping 100% is harder to justify. Define no-show and keep contact attempts.
Should deposits include VAT?
If you are VAT-registered, show VAT correctly on prices and invoices; kept sums can still count toward taxable turnover. Use the rolling £90,000 check with your accountant.
How do I take deposits without scaring direct bookers?
State pounds and percentage, put the cancellation table next to the pay button, and offer a flexible rate. Surprise drives abandonment more than a clear £40 deposit on a £180 stay.
Where Stayvieo fits
Stayvieo is built for independent UK hotels, B&Bs, guest houses and holiday lets — including properties we support in and around Canterbury. The cancellation policy is still the owner’s wording. The software should make the mechanics match it: deposits and balances via Stripe into your own account, confirmation emails that repeat your schedule, and one calendar so a cancelled night can be sold again across channels (channel manager, direct bookings).
Plans start at £29 a month for under ten rooms, with no commission on your bookings — see pricing. On a demo for a B&B, guest house or small hotel, the useful test is: can we configure a flexible rate and a firmer prepaid rate, take a deposit at booking, and show the same dates everywhere tonight?
Or call +44 7888 869368 — a real person, real hours.
