What must a Payment Notice include under the Construction Act?
A Payment Notice must state the sum your main contractor considers due at the payment due date and how that sum was worked out.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
That is the rule in section 110A of the Housing Grants, Construction and Regeneration Act 1996. In practice, check that the notice you receive also shows who sent it and to whom. It should name the contract, the cycle and the application it answers. It should show the total value to date, what has already been paid and the balance now due. Every deduction needs a reason and a figure you can check, not a bare label. If no notice arrives, your subcontract may give you a default route, but check it against the contract rather than assume it.
Example
Illustrative example. The scenario and figures are invented.
The facts
You apply for £35,000 for the cycle. Your main contractor values the work to date at £90,000 and has already paid £56,000, with no other adjustments.
What happens
- £90,000 less the £56,000 already paid gives £34,000.
- The notice states £34,000 and explains the £1,000 difference from your application, using the payment due date and its own valuation.
- You check that it names the contract, the cycle and you as the recipient, and you keep the record of when it arrived.
The notice in figures
| Item | Amount |
|---|---|
| Application | £35,000 |
| Value of the work to date | £90,000 |
| Already paid | £56,000 |
| Sum stated in the notice | £34,000 |
| Difference from the application | £1,000 |
The outcome
The notice states a sum and shows how it was worked out. Whether it counts for the cycle still depends on your subcontract and how it was sent.
To have every Payment Notice checked for its sum and basis the day it lands, see our Underpayment Prevention service.