The Payment Game in Construction: A Practical Guide for Subcontractors to Get Paid on Time

A clear, contractor-friendly breakdown of payment applications, notices, and deadlines — and how subcontractors can protect their cashflow under UK construction law.

1. What Is a Payment Application?

A Payment Application is your formal request for payment. Every relevant construction contract sets out a specific Application Date (sometimes known as the cut-off date). Miss it, and you may not be able to submit a valid application until the next cycle.

Tip: Mark the date in your diary or set recurring reminders so you never miss an application window.

2. Due Date vs Final Date for Payment

These two concepts are often confused but critically important:

• Due Date – the date on which your work is valued and, in principle, the payment becomes due.
• Final Date for Payment – the date by which the money must actually reach your account.

The period between these dates varies from 7 to 30 days, depending on the contract.

Tip: Before starting work, ensure the contract clearly states both dates and diarise them immediately.

3. Payment Notices

The main contractor (or employer) must provide a Payment Notice, usually within 5 days of your Payment Application or the Due Date. This notice confirms the amount they intend to pay and how it was calculated.

If they fail to provide a Payment Notice, your Payment Application becomes the default notice — meaning it should be paid in full.

Tip: Ensure your Payment Application is accurate, well-documented, and clearly states the amount you seek.

4. Pay Less Notices

A Pay Less Notice is the only lawful way for a payer to deduct sums (for defects, damages or rework). However:

• It must clearly show how the reduced figure was calculated.
• It must be issued before the contractual or statutory deadline.
• If the payer misses the deadline, they are legally required to pay the full amount, even if they dispute it.

Tip: Always note the Pay Less Notice deadline so you know exactly how much (and when) you should be paid.

5. Why Payment Procedures Matter

Most payment disputes arise because of missed deadlines, unclear notices, or incorrect assumptions about the process.

Understanding the timetable protects subcontractors by ensuring:

• You do not unintentionally lose entitlement to payment.
• You can enforce full payment if the main contractor fails to serve valid notices.
• You can act quickly if money does not arrive on time.

The payment process may be strict, but once you master the timeline, it becomes far more manageable.

6. Quick Checklist for Subcontractors

✔ Know your key dates: Application Date, Due Date, Final Date for Payment, and Notice Deadlines.
✔ Send clear and compliant applications by the method required under the contract.
✔ Do not assume all contracts follow the same rules — many do not.
✔ If no contract terms exist, the Scheme for Construction Contracts (England & Wales) 1998 applies.
✔ Act quickly if payment is late or notices aren’t served correctly.

The payment regime in construction is rigid — but it works in your favour when you understand the process. Keep your paperwork precise, never miss the application date, and remember:

No valid Pay Less Notice = you are entitled to full payment.

If you require tailored advice, training or assistance on any of these topics, contact our specialists at:
Claire.Iacovou@kingsley-wood.com
Graham.Cashin@kingsley-wood.com