So I setup a cancel transaction procedure as the person didn't pay or contact me regarding the item. (I later found out I should if put in a did not pay procedure). Anyway he's denied my request. What can I do now? It's leaving me no option. Am I forced to pay this final value fee even though I didn't get paid and no further transaction is taking place?
Yes, that's right--you should have opened UPI case. Yes, you now will have to pay the Final Value fee.
You took a chance that a non-communicative buyer would cooperate with the cancellation request.
this is exactly why it is not a good idea to open a cancellation on a non payer unless they have specifically asked you and given you their word they will cancel.
once that cancellation is denied, there is no going back and there is nothing you can do.
personally, I would call Ebay and talk to someone about it and see if they have a 1 time courtesy refund option and also to let Ebay know about this user in case they do have history.
Am I forced to pay this final value fee even though I didn't get paid and no further transaction is taking place?
Yes. In the future, report buyers for non payment. You may want to call or chat (if available) with eBay UK CS. They may or may not issue a one time courtesy credit.
Unfortunately, you're stuck paying eBay's fees for this non-sale. Write it off a a learning experience, and use the Unpaid Item Dispute in the future... the Cancel Request should only be used when both parties are in agreement to cancel.
Make sure you add this member's ID to your Blocked Bidders List be you relit it (look under eBay's Site Map).
Graciously grin when you growl...