Understanding your payment cycle and notices
An application, a valuation and a payment notice have different jobs. Understanding the sequence helps you see what has happened to each payment.
By Jack Butler-Kettle · Updated
Guidance for England and Wales. Check the contract, amendments and facts that apply to your job.
The short answer
Map one payment cycle using your subcontract and the applicable law. Record your application, the due date, each notice and the final date for payment. Keep valuation disagreements separate from questions about the notified sum.
Identify the payment rules
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.
Give each document its proper role
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 subcontract uses.
Where a required payer notice is missing, section 110B addresses default notices. An earlier application only counts if the relevant requirements are satisfied.
Track dates and amounts separately
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.
Check before taking the next step
Preserve the notice, attachments and evidence of delivery. Check calculations, the recipient and the agreed communication method.
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.
Example
Fictional example, not a client result. Figures are simplified to explain the point.
The facts
A cladding subcontractor applies for £12,000. A notice states £9,500 and the bank receipt is £8,000.
What happens
It records all three figures separately and saves the notice with its calculation.
It checks which document establishes the notified sum and whether any further notice changes the payment position.
It separates the unpaid balance question from the disagreement over the original valuation.
What this shows
The £4,000 difference from the application is not treated as one automatic debt. The relevant notices and dates still need assessment.
Sources
- Housing Grants, Construction and Regeneration Act 1996, Part II (Construction contracts), as amended by the Local Democracy, Economic Development and Construction Act 2009, Part 8. legislation.gov.uk.
- Housing Grants, Construction and Regeneration Act 1996, s 110A (Payment notices: contractual requirements). 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.
- Housing Grants, Construction and Regeneration Act 1996, s 111 (Requirement to pay notified sum). legislation.gov.uk.
- Housing Grants, Construction and Regeneration Act 1996, s 112 (Right to suspend performance for non-payment). legislation.gov.uk.