What is the Notified Sum under the Construction Act?

The statutory definition

The Notified Sum is a creature of statute. It comes from the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act), as amended by the Local Democracy, Economic Development and Construction Act 2009. For every payment cycle in a construction contract the Act requires a sum to be identified as due. That figure is the Notified Sum. It is not the amount the main contractor thinks is fair, nor the amount that survives a later valuation dispute. It is the amount the Act says must be paid for that cycle, and it is fixed by the notice regime, not by argument.

How the sum is fixed

Section 110A sets the primary route. The payer must give a Payment Notice within five days of the due date, stating the sum the payer considers due and the basis for it. If the payer gives that notice, the sum stated in it is the Notified Sum. The point of the notice is precision: it commits the payer to a figure early and in writing.

The Act then closes the gap the payer is most tempted to exploit. If the payer serves no Payment Notice, the subcontractor's Application for Payment stands as the default payment notice, and the sum applied for becomes the Notified Sum. Silence does not delay payment. It hands the subcontractor the number. A well-drafted Application for Payment is therefore not merely a request; where the payer fails to respond it is the instrument that fixes the debt.

Section 111: paid in full unless displaced

Section 111 is where the Notified Sum bites. It provides that the payer must pay the Notified Sum in full by the final date for payment. The only way to pay less is to serve a valid Pay Less Notice before the final date for payment, stating the reduced sum and the basis for the reduction. Under the Scheme for Construction Contracts the Pay Less Notice must be given not later than seven days before the final date for payment.

The Payment Notice and the Pay Less Notice are distinct instruments doing distinct jobs. The Payment Notice fixes the sum at the start of the cycle. The Pay Less Notice is the payer's only route to pay a smaller amount at the end of it. Conflating the two is a common and expensive error. If the payer serves no valid Pay Less Notice, there is nothing to displace the Notified Sum, and the whole of it falls due.

Why it is the central concept for enforcement

The Notified Sum is the concept everything else in payment enforcement turns on, because it converts a valuation into a debt. Once the sum is notified and the final date for payment passes without a valid Pay Less Notice, the subcontractor is not owed an arguable claim; it is owed a fixed number the payer was obliged to pay. That is what makes it enforceable.

• It replaces a contested account with a single figure the payer is bound to.
• It removes the payer's ability to re-argue valuation after the deadline has passed.
• It gives the adjudicator a clean question: was the Notified Sum paid in full, and if not, was a valid Pay Less Notice served in time.
• It underpins the smash-and-grab adjudication, where the only issue is the unpaid Notified Sum.

Section 108 lets a subcontractor refer a dispute to adjudication at any time. The adjudicator must reach a decision within 28 days, and that decision is binding and immediately enforceable; the courts summarised the position in Macob v Morrison as pay now, argue later. Where the payer served no valid Pay Less Notice, the enforcement is brutally simple: the Notified Sum was due, it was not paid, and the adjudicator orders it paid. Any dispute about the true value of the work is left for another day and does not delay the cash.

Fixing the sum in practice

Knowing the law is not the same as holding the evidence. When the deadline lapses, the subcontractor must be able to show, to the day, what was applied for, what notice the payer gave or failed to give, and when the final date for payment fell. Late payment already stretches subcontractor days sales outstanding to 65 to 80 days, and with 3,827 UK construction firms going insolvent in the twelve months to March 2026, specialist subcontractors more than half of the monthly count, the record either exists on the day the money crystallises or it does not exist at all.

Contra is built for exactly that. The Register™ tracks every live Application for Payment across every main contractor. The Clock™ runs the statutory countdown on each notice, so the payer's five days and the seven-day Pay Less window are watched, not guessed. When a deadline lapses with no valid Pay Less Notice, that becomes Crystallised Entitlement™: the Notified Sum is now the sub's to force, and The Record™ holds the dated, signed, admissible trail an adjudicator needs. Draw Forward™, advancing a Notified Sum the same day it crystallises, is coming. Request access.