When are payment and pay less notices due under the Construction Act?
Under the Construction Act 1996, a payment notice is due within 5 days after each due date. The notified sum is paid by the final date unless a pay less notice arrives in time. Where the contract is silent, the Scheme sets the final date 17 days after the due date and the pay less notice 7 days before it.
The notice, the notified sum and the pay less notice
The payment notice runs from the payment due date, not from the claim: within 5 days after it. The notified sum is then paid by the final date unless a pay less notice arrives in time. The notified sum is the sum in the payer's payment notice, or in the payee's notice where the contract required it or the payee gave one in default (s 111(2)).
What the Act requires
These come from the Act itself, for every construction contract it covers.
| Duty | Window and section | If missed |
|---|---|---|
| Receive a payment notice within 5 days after each payment due date, stating the sum considered due and how it is calculated | 5 dayss 110A(1)-(6) | no penalty statedDisputes |
| Where no payment notice arrives in time, give the payer your own notice of the sum due and its basis, because the final date for payment moves back one day for every day you wait | none setAvailable at any time after the payer's notice was due (s 110B(2)), so no window is recorded.s 110B(1)-(4), 111(2)(c) | no penalty statedDisputes |
| Receive any notice of intention to pay less than the notified sum no later than the prescribed period before the final date for payment, or the notified sum is payable in full | none setThe Act sets no number, so no window is recorded here.s 111(1)-(7), 111(10), 111(11) | you are liable for the full amountDisputes |
| Be paid the notified sum, less only what a valid pay less notice states, on or before the final date for payment | none setThe Act sets no number, so no window is recorded here.s 110(1)(b), 111(1), 111(2), 111(6) | you are liable for the full amountDisputes |
| Give at least 7 days written notice, stating the grounds, before suspending any or all work for non-payment of the notified sum | 7 dayss 112(1)-(4) | no penalty statedDisputes |
What the Scheme sets where the contract does not
These apply only where the contract leaves the point out. Where the contract sets a compliant due date, final date or pay less period, the contract's own applies instead.
| Duty | Window and section | If missed |
|---|---|---|
| Where the contract sets no payment mechanism, be due each interim payment on the later of 7 days after the end of each 28 day period or the making of your claim | 7 daysreg 3; Sch Pt II para 1, 2, 3, 4, 12 | no penalty statedDisputes |
| Where the contract sets no payment mechanism, be due the final payment on the later of 30 days after completion of the work or the making of your claim | 30 daysreg 3; Sch Pt II para 3, 5, 6, 7 | no penalty statedDisputes |
| Where the contract sets no final date for payment, be paid within 17 days of the date each payment becomes due | 17 daysreg 3(b); Sch Pt II para 8 | no penalty statedDisputes |
| Where the parties agreed no period, receive any pay less notice not later than 7 days before the final date for payment | 7 daysreg 3(a); Sch Pt II para 10 | you are liable for the full amountDisputes |
What the library notes on each duty
Quoted a whole sentence at a time from the library's note on each row.
Receive a payment notice within 5 days after each payment due date, stating the sum considered due and how it is calculated
s 110A(1)-(6) · 5 days · no penalty stated
- The contract must require the payer or a person it specifies to give the notice not later than 5 days after the payment due date (s 110A(1)(a)), or require the payee to give it (s 110A(1)(b)).
- It states the sum considered due at the due date and the basis of calculation, which may be zero (s 110A(2)-(4)).
- Where the contract does not comply, the Scheme imposes the same 5 day notice on the payer (Scheme Pt II para 9).
- The window comes from the Act: it is fixed, not the contract's to set.
- Days exclude Christmas Day, Good Friday and bank holidays (s 116).
Where no payment notice arrives in time, give the payer your own notice of the sum due and its basis, because the final date for payment moves back one day for every day you wait
s 110B(1)-(4), 111(2)(c) · none set · no penalty stated
- Available at any time after the payer's notice was due (s 110B(2)), so no window is recorded.
- The final date for payment of the sum in the notice is postponed by as many days as the notice comes after that date (s 110B(3)).
- Where the contract already let the payee state the sum and basis before the payer's notice was due (an application for payment), and the payee did, that application counts as this notice and no other may be given (s 110B(4)).
Receive any notice of intention to pay less than the notified sum no later than the prescribed period before the final date for payment, or the notified sum is payable in full
s 111(1)-(7), 111(10), 111(11) · none set · you are liable for the full amount
- The payer must pay the notified sum on or before the final date unless it, or a specified person, gives a notice of intention to pay less (s 111(1), (3)).
- The notice states the sum the payer considers due on the date it is served and the basis of calculation, which may be zero (s 111(4)); where the notified sum came from the payee's notice, it may not be given before that notice (s 111(5)(b)).
Be paid the notified sum, less only what a valid pay less notice states, on or before the final date for payment
s 110(1)(b), 111(1), 111(2), 111(6) · none set · you are liable for the full amount
- The notified sum is the sum in the payer's payment notice, or in the payee's notice where the contract required it or the payee gave one in default (s 111(2)).
Give at least 7 days written notice, stating the grounds, before suspending any or all work for non-payment of the notified sum
s 112(1)-(4) · 7 days · no penalty stated
- Available where the notified sum is not paid by the final date (s 112(1)).
- The right ends when payment is made in full (s 112(3)).
- The party in default must pay a reasonable amount for the costs and expenses the suspension causes (s 112(3A)), and the suspension period is disregarded in computing any contractual time limit, with a date adjusted to match (s 112(4)).
Where the contract sets no payment mechanism, be due each interim payment on the later of 7 days after the end of each 28 day period or the making of your claim
reg 3; Sch Pt II para 1, 2, 3, 4, 12 · 7 days · no penalty stated
- Scheme only, England: applies where the parties fail to agree the amount or intervals of stage payments (para 1) or to give an adequate mechanism for what is due and when (para 3).
- The relevant period is the one the contract specifies or, failing that, 28 days (para 12).
- Each payment is the value of work (and, if the contract pays for them, materials on or brought to site) to the end of the period, less what has been paid or is due (para 2).
Where the contract sets no payment mechanism, be due the final payment on the later of 30 days after completion of the work or the making of your claim
reg 3; Sch Pt II para 3, 5, 6, 7 · 30 days · no penalty stated
- Scheme only, England.
- The final payment is the contract price less the stage payments that have become due (para 5).
- The same 30 days apply to the whole contract price under a contract of less than 45 days (para 6).
Where the contract sets no final date for payment, be paid within 17 days of the date each payment becomes due
reg 3(b); Sch Pt II para 8 · 17 days · no penalty stated
- Scheme only, England: applies where the contract does not provide a final date for payment, as Act s 110(1)(b) requires.
Where the parties agreed no period, receive any pay less notice not later than 7 days before the final date for payment
reg 3(a); Sch Pt II para 10 · 7 days · you are liable for the full amount
- Scheme only, England: the prescribed period of Act s 111(5) and (7)(b) where the parties did not agree one.
- A pay less notice not given in time leaves the payer liable for the notified sum (Act s 111(1)).
If the sum is not paid
Either party can refer the dispute to adjudication at any time. Whether the Act covers the contract at all is on which contracts.
What this page is, and is not
It is the section text this library holds for England, from The Construction (Design and Management) Regulations 2015 (Great Britain), Housing Grants, Construction and Regeneration Act 1996, Part II (Construction Contracts) and The Scheme for Construction Contracts (England and Wales) Regulations 1998, as amended for England, with the window and the consequence. It is not legal advice, and it is not a substitute for reading the Regulations, the Act, the Scheme and the contract you signed.
Demiton does not yet track English projects. These pages set out the duties; the product does not run these checks on an English job today.
No library of law is complete, and Demiton never says this one is. An obligation the library does not hold, and you did not add, is not protected. You can add your own to any job.