What is the difference between a Payment Notice and a Pay Less Notice?

Two notices, two jobs

The Construction Act, amended by the LDEDC Act 2009, governs payment on every construction contract for construction operations in the UK. It runs on two notices that do different jobs, and conflating them is the single most common way a subcontractor loses money it is owed. The Payment Notice answers one question: what is the sum due for this cycle. The Pay Less Notice answers a different one: can the payer lawfully pay less than that sum. One establishes the figure; the other is the only mechanism to knock it down. A payer who has missed the first cannot fix the problem by reaching for the second, and a subcontractor who understands both holds the timetable in its own hands.

The Payment Notice (section 110A)

Under section 110A the payer, usually the main contractor, must give a Payment Notice within five days of the due date, stating the sum the payer considers due and the basis on which it is calculated. That figure becomes the Notified Sum. The provision has a sting the payer often forgets: if the payer gives no Payment Notice within those five days, the subcontractor's Application for Payment stands as the default payment notice, and the sum applied for becomes the Notified Sum. Get the Application for Payment right and serve it properly, and the payer's silence hands you your own number. The notice fixes what is owed for that cycle. Nothing about a later dispute changes it unless the second notice is served on time.

The Pay Less Notice (section 111)

Section 111 provides the only lawful route to pay less than the Notified Sum. To use it, the payer must serve a Pay Less Notice before the final date for payment, stating the sum the payer considers due at the date of the notice and the basis on which that reduced sum is calculated. The period for service is set by the contract; where the contract is silent, the Scheme for Construction Contracts supplies the default, requiring the notice not later than seven days before the final date for payment. A Pay Less Notice served late, or one that fails to state a sum and its basis, is no notice at all. Deductions the payer wants to make, for defects, delay, or contra charges, live and die by this notice. Miss it, and the grounds go with it.

Payment Notice vs Pay Less Notice, side by side

What happens when a notice is missed

When the payer misses the Payment Notice, the subcontractor's Application for Payment becomes the notice and sets the Notified Sum at the applied-for figure. When the payer then also fails to serve a valid Pay Less Notice before the final date for payment, the full Notified Sum is due, in full, on that date. The money stops being contested and becomes payable. If it is not paid, either party may refer the dispute to adjudication at any time under section 108, and the adjudicator must reach a decision within twenty-eight days. That decision binds the parties and is enforced on a pay now, argue later basis, the principle settled in Macob v Morrison [1999] EWHC 254 (TCC): the payer pays what the notices make due and litigates the merits afterwards, if at all. A missed deadline is not a technicality. It is a decided sum.

How Contra holds the timetable

Specialist subcontractors run days sales outstanding of sixty-five to eighty days, and in the twelve months to March 2026, 3,827 UK construction firms went insolvent, specialist subcontractors more than half of the monthly count. The Construction Act already arms you; the failure is almost always in tracking, not in law. Contra is the tool that closes that gap. The Register™ tracks every Application for Payment across every main contractor. The Clock™ runs the statutory countdown on each notice, so the five days from the due date and the final date for payment are never a date someone forgot to diary. Crystallised Entitlement™ marks the moment a deadline lapses and drafts the demand letter the same day. The Record™ keeps a dated, admissible audit trail of every notice served and every deadline crossed. Draw Forward™, same-day advance against a Notified Sum, is coming. The Act gives you the entitlement; Contra makes sure you take it. Request access.