How does the Construction Act payment cycle work?

For a contract covered by the Act, the payment cycle connects valuation, a due date, payment notices and a final date for payment. The notified sum comes from the valid notice mechanism; a compliant pay less notice can change the amount payable. Your contract and any applicable Scheme provisions determine the actual dates and required documents.

The Housing Grants, Construction and Regeneration Act 1996 provides payment requirements for contracts within its scope. Check coverage rather than assuming every supply arrangement qualifies.

Its construction provisions apply in Great Britain; Northern Ireland has separate legislation. Your agreement and any applicable default Scheme must be considered together.

The Construction Act guide explains coverage. The Scheme guide explains missing or non-compliant terms.

For a subcontractor, start with your own agreement with the main contractor. Establish the application requirements, assessment mechanism and actual final date for payment.

The client’s upstream payment status does not replace this check. Use the payment-rights FAQ and the exact timetable questions linked below.

Your application states the amount you seek and its basis. An invoice may serve an accounting purpose; its contractual effect depends on the agreed procedure.

Section 110A allows payment-notice arrangements involving the payer, a specified person or the payee. Read which mechanism your contract uses.

Where a required payer notice is missing, section 110B addresses default notices. An earlier application only counts if the relevant requirements are satisfied.

A payment notice states the sum considered due at the due date and its basis. It is not necessarily the amount applied for.

A pay less notice states the sum considered due when that notice is given and its basis. It has a different deadline.

Read the comparison of the two notices if a document is being described as both.

The due date and final date for payment are different milestones. Record both, alongside application and notice deadlines.

Section 111 concerns payment of the notified sum and notices of an intention to pay less. A notice should not be judged by its heading alone.

Keep columns for applied, assessed, notified, paid and disputed amounts. Record the reasons for deductions rather than combining every difference into one unexplained balance.

The Act requires a compliant mechanism; it does not impose one identical payment calendar on every contract. Start with your agreed terms.

This illustration assumes an established due date, a payer-notice mechanism and the relevant England-and-Wales Scheme fallback periods. It excludes any default-notice postponement.

Part II of the Scheme for Construction Contracts (England and Wales) Regulations 1998 supplies payment provisions where required. Identify which provisions apply to your agreement.

The illustration uses day numbers to explain the sequence. Check service rules and excluded days before converting them into calendar dates.

A missing notice does not make every application automatically payable. Check whether a valid earlier application qualifies under the applicable section 110B mechanism.

Otherwise a default payment notice may be needed. Its timing can postpone the final date by the corresponding delay.

Keep the original and revised timetable visible. Do not reuse the day-17 illustration after a relevant postponement without recalculating the dates.

Underpayment recovery examines this notice position separately from the underlying valuation, using the actual documents and delivery evidence.

Contract families implement payment through different procedures. Editions, options, contract forms and amendments can change the dates and responsible people.

The JCT payment timeline and NEC4 payment timeline show contract payment diaries with stated example assumptions. Use the actual signed terms for your project.

Do not copy a main-contract timetable into a subcontract calendar. Preserve the form, edition and clause references behind each date.

Preserve the notice, attachments and evidence of delivery. Check calculations, the recipient and the agreed communication method.

A customer's Fair Payment Code award is a separate voluntary commitment. It does not replace your contract's payment terms or the applicable notice requirements.

The payment dates calculator illustrates a sequence using stated assumptions. It cannot decide whether a notice is valid.

Do not assume late payment permits immediate suspension. Section 112 has conditions, including notice, where it applies. Check them before stopping performance.

If the final date has passed, follow contractor or client non-payment checks. Our Overdue payment recovery addresses a supported overdue account.

Routine Subcontract payment application preparation is a different task from pursuing an established payment dispute.

Our Subcontract payment assessments service prepares or assesses the ordinary cycle and keeps its valuation record reconciled. Our Project Partner Retainer can provide recurring support within an agreed monthly scope. For an overdue balance, Overdue payment recovery assesses the unpaid sum and its contractual basis.