How long does a main contractor have to pay a subcontractor?
Until the final date for payment your subcontract sets, or, in England and Wales, 17 days after the due date if it sets none.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
The final date for payment is the last day your main contractor can pay without being late. It is counted from the due date, not from your application or your invoice. So first find the due date, and what triggers it, in your signed subcontract and its amendments. Keep four dates apart: the valuation date, the application date, the due date and the final date for payment. Interim and final payments can have different periods, and the rules on serving notices can affect the count. If the subcontract gives no final date, the fallback applies. Paragraph 8 of Part II of the Scheme for Construction Contracts (England and Wales) Regulations 1998 sets it at 17 days after the due date. That is a fallback for particular cases in England and Wales, not a rule for every payment or every part of the UK. One thing can move the date: your own notice, given late. That arises when your main contractor sends no Payment Notice. Section 110B of the Housing Grants, Construction and Regeneration Act 1996 can then push the final date back by the days your notice was late. A later invoice does not, as a rule, change it. Work out every final date for the job the day you sign, and check the contract before you rely on a default.
The Scheme's defaults where the contract is silent
| Step | Scheme default |
|---|---|
| Due Date | The later of 7 days after the end of the payment period and the payee making its claim |
| Payment Notice | Within 5 days of the Due Date |
| Pay Less Notice | At least 7 days before the Final Date For Payment |
| Final Date For Payment | 17 days from the Due Date |
Example
Illustrative example. The scenario and figures are invented.
The facts
Your subcontract makes 4 March the due date and gives 28 days from the due date to the final date for payment. You need the final date in the diary.
What happens
- 1 April is worked out as the final date.
- The subcontract is checked for how it counts days, how notices must be served, holidays, and any different rule for the final payment.
- The clause and the assumptions are kept beside the date, so anyone can check it.
The outcome
The final date of 1 April stands, with its clause and assumptions beside it, ready to correct if the subcontract's own definitions say otherwise.
Late Payment Prevention reads every final date from your signed subcontracts and puts the chase on the diary.
Sources
- Scheme for Construction Contracts (England and Wales) Regulations 1998, SI 1998/649, Schedule, Part II, para 8 (Final date for payment). legislation.gov.uk.
- Housing Grants, Construction and Regeneration Act 1996, s 110B (Payment notices: payee’s notice in default of payer’s notice). legislation.gov.uk.