Retentions in construction: how they work and how to claim them
Updated 11 October 2026 · 2026/27 tax year
On building work, the main contractor often keeps back a small share of what they owe you until the job's finished and any snags are put right. That's a retention. It's your money, and it's easy to forget to claim.
How much and how long
- Usually 3% to 5% of each valuation or invoice
- Often half is released at practical completion
- The rest after the defects period, usually 6 or 12 months later
- Your contract says what applies, so check it
On the invoice
Show the full value of the work, then take the retention off to give the amount due now. With CIS, the deduction is worked out on the labour as usual.
Claiming it back
Retentions aren't paid automatically. When the date comes, send an invoice for the retention, referring to the original invoice, and chase it like any other.
Tax
On the cash basis, a retention is income when you're paid it, not when the first invoice was paid. Keep track of what's held back, or you'll understate or double count it.
This guide is general information, not tax advice. Check HMRC's guidance or ask an accountant about your own situation.
More guides
- Self Assessment for sole traders: filling in the self-employment pages
- Charging customers for materials: markup, VAT and recharges
- Statement of account: what it is and when to send one
- Late payment interest: what you can charge business customers
- CIS for subcontractors: how deductions work and getting money back