When a Pay Less Notice lands, check the process and the figures separately
A Pay Less Notice raises two questions: whether it was given properly, and whether its deductions are right. First save the notice, its attachments and a record of when and how it arrived, then answer each question on its own evidence.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
If your checks show the notice or its deductions are wrong, see how to challenge a Pay Less Notice.
Why it matters
A notice that cuts your payment invites one of two mistakes. The first is to argue the figures and never check the notice itself. Was it given in time, by the right person, stating a sum and how that sum was calculated? Skip that, and a notice that may not have worked gets paid as if it had. The second is to call the notice invalid for being late, without checking the contract's rules on counting days and serving documents. Then you lose that argument, even though the deductions were wrong anyway. Keep the two questions apart and each gets a proper answer. Your response can then say exactly what you accept, what you dispute and why.
How to do it
- Save the notice, its attachments and the email or portal record showing when and how it arrived.
- Check the process: which cycle it answers, who sent it and when it arrived against the window. Check that it states a sum and shows how that sum was calculated.
- Check the figures: set the notice against your application on the same basis, and match every deduction to its stated reason.
- Link each disputed quantity, rate or item to the drawings, instructions and records that support your figure.
- Send a dated response saying what you accept, what you dispute and on what evidence.
- Take advice promptly if a date may already have passed.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor applies for £36,000. The main contractor's Pay Less Notice states £31,000 on the same basis. It puts the £5,000 difference down to a quantity cut and an excluded item.
What happens
- The notice, its email and the arrival time are saved before anyone replies.
- The process check shows it came from the named commercial manager, inside the window, with a sum and a calculation.
- The breakdown puts £3,200 down to a quantity cut on the blockwork and £1,800 to an item said to be outside the scope. Together they make the £5,000.
- The blockwork is remeasured from the drawings and the dated photographs, which support the original quantity.
- The excluded item is traced to the scope schedule, which lists it. The response goes back with both documents attached.
The difference reconciled
| Item | Amount |
|---|---|
| Application | £36,000 |
| Pay Less Notice | £31,000 |
| Quantity reduction | £3,200 |
| Item said to be excluded | £1,800 |
The outcome
The notice itself is valid, so £31,000 is paid on the final date for payment. Both disputed items are accepted in the next Payment Notice. The £5,000 arrives a month later without a dispute.
To have this done for you, see our Underpayment Claim service.