Can they deduct money without a Pay Less Notice?
Not from the notified sum: a deduction already inside a valid Payment Notice needs no Pay Less Notice, but taking money off the notified sum does.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
Under section 111 of the Housing Grants, Construction and Regeneration Act 1996, your main contractor must pay the notified sum by the final date for payment. The exception is a valid Pay Less Notice that arrives in time. So first work out the notified sum from your subcontract and the notices actually sent, and compare it with what was paid. Then look at the deduction itself. It may be part of the valuation under your subcontract, or a set-off, contra-charge or other counterclaim. Its label alone does not tell you which. Record the shortfall and keep the documents before you choose your next step: a demand, a response on the valuation, a specialist review or a legal route. A missing notice does not automatically settle every issue. Nor does it, on its own, make suspending work the right move.
Example
Illustrative example. The scenario and figures are invented.
The facts
The notified sum for the cycle is £48,000. You receive £41,000, with a £7,000 snagging deduction shown against it. You want to know if that deduction can stand without a Pay Less Notice.
What happens
- You compare the snagging deduction with the subcontract, the notices, the valuation evidence and the record of how the notices were sent.
- You report separately whether the notice rules were followed and whether the £7,000 is supported.
The payment in figures
| Item | Amount |
|---|---|
| Notified sum | £48,000 |
| Received | £41,000 |
| Snagging deduction | £7,000 |
The outcome
The two questions are answered apart: whether the notice rules were followed, and whether the £7,000 is justified. They are different questions, even about the same £7,000.
If money has landed short with no notice, Underpayment Claim checks where you stand the same day and recovers what the contract supports.