non-refund legal?

Hi, this is my first post and in fact first ever situation where i feel some advice would help. My wife, young son and myself booked into a budget bed and breakfast for three nights paying up front with cash to a total of £195. As we arrived late we were let in, given our key and went to relax as we had traveled quite a way. I am a smoker and in the middle of the night i regretfully had a few puffs on a cigarette whilst literally hanging out of the window. The next day our family went out for lunch and upon returning the bed and breakfast owners told us we were being kicked out as the owner had checked our room and found some ash on the windowsill. I accept i made a mistake but it was NEVER clearly stipulated the lodgings were smoke-free. I know that some hotels do have permits though this one apparently did not. The ejection was taken on the chin though (even though we were now without anywhere to sleep in an unknown town) but what made it difficult to continue with the holiday in another premises was the outright and fairly rude assertion that we would not be receiving a penny back from the money paid out on the first night. This meant i lost out on £130 for smoking, which incidentally wasn't proven! Can someone please give me some clarity regarding the money owed? It would have been cheaper to receive an on-the-spot fine of £50 or £30 if paid within 15 days. I also think a warning would have been appropriate but am more than willing to accept if users on this forum agree with the hotel owner. Thank you for reading and any replies will be greatly appreciated.