How to Check a Pay Less Notice Under the Construction Act (HGCRA 1996)

Mark one pay less notice against the final date that applies, the sum due, and a basis you can follow from the notice, before you book that sum or start a smash-and-grab. A smash-and-grab is a claim for the notified sum, not a fresh valuation. Section 111 requires the notified sum by the final date unless a valid pay less notice replaces it. Seven days is only the fallback. If a sliding final date fails, 17 days can apply instead.

Disclaimer: Checkory provides AI support, not legal advice. Consult a qualified lawyer for binding decisions.

Why mark one pay less notice before you book the reduced sum?

Book the reduced figure only after the notice is in time, states a sum, and states a basis you can follow from the notice itself. Deerns [2026] EWHC 1509 (TCC) refused a 30-day final date that could slide while the due date stayed fixed. Davies & Davies records the claim as £910,501.71 plus VAT. The Scheme then set 17 days.

A commercial Net 30 is a different test. See the Net 30 payment-terms checklist.

Does the Construction Act apply to this contract?

Stop if this agreement is not a construction contract, or if the England and Wales Scheme does not apply. Section 104 covers construction operations, arranging them, or labour, including related design or surveying work. A contract of employment falls outside it. Part 2 can apply in England, Wales, or Scotland.

Section 106 excludes a residential occupier: work on a dwelling that party occupies or intends to occupy. An office fit-out is not that work. A Scottish contract uses Scotland's Scheme, not paragraphs 8 and 10 of SI 1998/649.

Record the due date and who had to give the payment notice

Write the due date, who had to give the payment notice, and the five-day window. Keep it separate from the pay less notice. Section 110A requires the notice not later than five days after the due date, with the sum considered due and the basis. Zero is allowed. If the contract does not say this, the Scheme applies.

A missed payer notice does not decide the later pay less notice. Section 110B can postpone the final date by the length of the payee's delay, or treat an earlier payee notification as the default notice. Not every application becomes that default notice.

Which final-date clock do you count back from?

Choose the final date before you count backwards. Parties may agree any period to that date, but that period has to stay fixed once the due date is known. Fenwick Elliott records the Deerns judge as requiring that fixed period. A clause that postpones the final date because the application was late fails section 110(1)(b). Earlier slippage does not rewrite the contract.

If the clause fails, Scheme paragraph 8 sets 17 days from the due date: 4 October 2026 becomes 21 October 2026, not 3 November 2026. BCLP identifies section 110B as the only Act route that lengthens that gap.

Count the agreed period back from that clock. Section 111(7) uses the five days the parties agreed. Scheme paragraph 10 supplies seven days only if the parties failed to agree. The Commercial Payments Bill is not in force: Gowling WLG, on 14 October 2026, records a Lords third reading due on 20 October 2026. Do not apply a seven-day minimum or a 30-day or 60-day cap.

Can you follow the sum and the basis from the notice itself?

State the sum due on the date of the notice and the basis of that sum. Section 111(4) allows zero and still requires the basis. Stevens & Bolton records deductions of £2,428,614.47 from £5,627,275.11, leaving £3,198,660.64 plus VAT, because the build-up was on the pay less notice. Holmes & Hills says a bare figure fails unless the notice incorporates the schedule. A reasonable recipient must see the basis. "Valuation to follow" does not.

One document cannot do both jobs. Gowling WLG records Vision Construct Ltd v Gypcraft [2025] EWHC 2707 (TCC): a late payment notice cannot be relabelled as a pay less notice. Foot Anstey on Placefirst [2025] EWHC 100 (TCC) records a letter and a spreadsheet, sent 31 July 2024, as two notices.

Was the notice served the way the notices clause requires?

Mark method, address, and any attachment the notices clause requires, separately from the date. If email counts only when the notice is attached, a bare email fails service even if the dates would have worked. Do not invent a deemed-receipt rule. Deemed receipt is covered in the notices-clause review.

Chase the notified sum, accept the reduced sum, or take advice?

The log reaches a fork: chase the notified sum, accept the reduced sum, or take advice before a smash-and-grab. If the notice is in time and has a sum and a basis, section 111(6) makes that the sum payable. Surveyor Success describes Grove as paying the notified sum first, then a separate true-value adjudication.

If the notice is late, or it has no basis on its face, do not book a bare zero. A missing payment notice is not the reason the later notice fails. Section 108 provides for referral within 7 days and a decision within 28 days of referral, longer by agreement or by up to 14 days with the referring party's consent. That timetable is not the referral.

Where the choice is still 16 October or 29 October, take the log to a construction solicitor before you book either figure. Upload the subcontract and the email on document analysis.