If you want to get paid on time – or win a smash-and-grab when they don't – you've got to understand payment notices and pay less notices. This is the paperwork that makes or breaks most construction payment fights.
This is general guidance only and is not legal advice. Always check your own contract and get proper legal advice before you send or rely on any formal notice.
1. THE BASIC PAYMENT NOTICE SEQUENCE
For every payment under a "construction contract" caught by the Act, there's a simple sequence the law expects:
- Due date – when the payment "arises" under the contract.
- Payment notice – must be given no later than 5 days after the due date, stating the sum due and how it's calculated (by payer or sometimes by you).
- Default/payment application – if they don't issue a payment notice, your compliant application or a separate default notice can set the "notified sum".
- Pay less notice – if they want to pay less than that notified sum, they must serve a pay less notice a set time before the final date for payment.
- Final date for payment – by then, they must pay the notified sum, unless there's a valid pay less notice.
Miss one of those steps or deadlines, and the consequences can be brutal – that's where smash-and-grab adjudications come from.
2. WHAT IS A PAYMENT NOTICE?
A payment notice is the official record of what the payer says is due on that payment cycle.
Under section 110A, a valid payment notice must:
- Be served no later than 5 days after the due date;
- State the sum the payer considers due at the due date (this can be zero);
- State the basis on which that sum is calculated – not just "subject to re-measurement", but a real breakdown.
Your contract can:
- Say the payer issues the payment notice; or
- Say you issue a "payment notice" or "application" that counts as the notice; or
- Fall back on the Scheme rules if it doesn't comply.
Key point: if they miss their payment notice deadline, your own application can usually take over as the notified sum – very powerful for you if it's clear and on time.
3. WHAT IS A PAY LESS NOTICE?
A pay less notice is the payer's one chance to say: "We're not paying the full notified sum – and here's exactly why."
Under section 111, a valid pay less notice must:
- Be served not later than the prescribed period before the final date for payment (the contract says how long; if not, the Scheme fills in – often 7 days);
- State the sum the payer considers to be due on the date of the notice (again, this can be zero);
- State the basis on which that sum is calculated – you should be able to see what they deducted and why.
If they want to pay you less than:
- The sum in their payment notice, or
- The sum in your default/application notice,
they must use a pay less notice properly. If they don't, they're stuck paying the full notified sum.
4. HOW YOU USE NOTICES TO PROTECT YOURSELF
This is where you make the law work for you, not against you.
4.1 Your applications must be "notice-ready"
Treat every application as if it might become the default payment notice.
Make sure each one:
- Has a clear heading: "Application for Payment No [X] – period [dates]";
- States the total sum due this period;
- Gives a basis of calculation – measured works, variations, prelims, retention, etc.;
- Is sent exactly how and when the contract says (email/portal/post, cut-off times).
If they fail to serve a valid payment notice, your clean, on-time application is what you'll rely on in any smash-and-grab.
4.2 When you can serve a default notice
Some contracts – and the Act via section 110B – also let you serve a default payment notice if the payer doesn't issue a payment notice.
In practice:
- You check: due date passed, no valid payment notice from them;
- You serve a notice stating the sum you say is due and the basis of calculation;
- That then becomes the notified sum if they don't respond properly.
Modern JCT forms sometimes make your interim application self-certifying so you don't even need a separate default notice – the sum applied becomes the notified sum automatically if they miss their notice.
5. WHAT HAPPENS IF THEY MESS UP THE NOTICES?
This is the smash-and-grab territory.
If:
- Your application/default notice is valid and on time; and
- They either:
- Don't serve a payment notice at all, or
- Serve a dodgy/late payment notice, and
- Don't serve a valid pay less notice in time,
then the law says they must pay the full notified sum by the final date for payment.
If they still don't pay, you can:
- Suspend work under section 112 (see 1.1); and/or
- Run a smash-and-grab adjudication purely on the notice failures and notified sum, not the "true value".
Recent cases mean the payer can come back with a "true value" adjudication fairly quickly – but that doesn't stop you using the notice rules to get cash in the door first.
Example from the real world:
- You apply for £80k. They don't issue a payment notice.
- They don't issue a compliant pay less notice either.
- On the final date for payment, £80k is the notified sum and they must pay it, even if they later say the real value is £60k.
6. COMMON NOTICE MISTAKES (AND HOW TO AVOID THEM)
Mistakes you'll see all the time:
Late notices Serving a payment or pay less notice a day late. Under the Act, late = invalid for that cycle. Always check timestamps and deadlines.
Not stating the sum and basis clearly Notices that just say "we dispute your valuation" or give a bald figure with no breakdown are asking for trouble. The Act expects a sum and the basis of calculation.
Sending it the wrong way Contracts often nail down how notices must be delivered. Sending a pay less notice to the wrong email or just uploading it to an obscure portal tab can make it ineffective.
Mixing up applications and notices Your application can become a notice, but not every PDF with a number on it is a valid notice. Use consistent headings and formats so there's no argument over what's what.
To protect yourself, build habits:
- Same template for every application and notice;
- Calendar reminders for due dates, notice deadlines and final dates;
- Save and file every notice and application with sent/received timestamps.
7. WHEN TO GET HELP
You can get a long way yourself with clean applications and basic notice discipline. Still, get professional help when:
- You're about to run a smash-and-grab on a big sum and need to be certain your notice/application stack is watertight.
- You're defending a pay less notice and need to know if it's genuinely compliant or not.
- The contract is heavily amended and the notice timetable is a maze.
A good construction lawyer or claims consultant will:
- Audit one payment cycle and map the due date, notice windows and final date;
- Tell you quickly if you've got a strong notified sum argument;
- Help draft notices and adjudication documents that actually hit the statutory requirements.
This page is guidance only and does not constitute legal advice. Using it does not make us your legal adviser. Always get advice from a qualified professional on your specific contract and payment cycle.
What to do next
- Read your contract and map out the due date, payment notice deadline, pay less notice deadline, and final date for payment for the current cycle.
- Set calendar reminders for every notice deadline · late by a day can be fatal.
- Make sure every application you send is "notice-ready": clear heading, sum due, basis of calculation, sent on time and in the right format.
- If they miss a payment or pay less notice, treat your application as the notified sum and chase payment immediately.
- Speak to a construction lawyer or claims consultant if you think you have a clean smash-and-grab opportunity.
Sources
- Housing Grants, Construction and Regeneration Act 1996 · sections 110A (payment notices) and 111 (pay less notices)
- Scheme for Construction Contracts (England and Wales) Regulations 1998 · fills in notice deadlines where the contract is silent
- Local Democracy, Economic Development and Construction Act 2009 · amended the payment notice regime
Common questions
What is the Construction Act?
The Construction Act is the Housing Grants, Construction and Regeneration Act 1996 (amended 2011). It gives every party in a construction contract the right to staged payments, payment notices, and adjudication. It applies to nearly all UK construction work except contracts with residential occupiers.
Payment Notice Deadlines reference card.
How long does a contractor have to pay a subcontractor?
Payment is due on the date set in the contract, or 17 days after the work is done if no date is set. The final date for payment is normally 14 to 30 days after the due date. If the contractor fails to issue a Pay Less Notice in time, they must pay your applied amount in full.
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