What a valid JCT payment application must contain under the Construction Act 1996, why Excel spreadsheets miss critical deadlines, and how to generate a compliant application in minutes.
Payment in UK construction is governed by the Housing Grants, Construction and Regeneration Act 1996, as amended by the Local Democracy, Economic Development and Construction Act 2009. The legislation applies to virtually every construction contract of more than 45 days duration, regardless of what the contract itself says about payment. Where the contract falls short of the statutory requirements, the Scheme for Construction Contracts (England and Wales) Regulations 1998 fills the gaps automatically.
Under Sections 110A and 110B of the Act, every interim payment cycle requires a payment notice that specifies the sum the payer considers due - or, if the payer fails to issue one, an application from the payee that triggers the statutory default. Section 111 then governs how and when that sum can be reduced: only by issuing a pay less notice by the prescribed deadline. Miss that deadline and the notified sum becomes payable in full, regardless of what the employer believes the true value to be.
Most UK contractors manage this process in Excel. They track application numbers and dates in a spreadsheet, manually calculate the final date for payment and the pay less notice deadline, and then hope they have the arithmetic right. They rarely do consistently. A single error - a due date miscalculated by a day, a pay less notice deadline stated incorrectly in the application - can cost a month's cash flow or undermine an adjudication. The Construction Act machinery rewards precision; informal spreadsheet management is not precise enough.
Under the JCT Design and Build 2016 and JCT Standard Building Contract 2016 suites, and consistent with the requirements of the Construction Act as amended, a payment application that is intended to operate as a payee's payment notice must contain the following.
Adjudicators and referring parties' solicitors are familiar with these deficiencies. Employers who wish to resist payment will look for them. These are the four most common failures.
Section 110A of the Housing Grants, Construction and Regeneration Act 1996 (as amended) requires a payment notice to specify the sum claimed and the basis on which it is calculated. An application that simply states a figure without identifying whether it is based on BQ rates, dayworks or a schedule of values is legally deficient - and an employer's solicitor will use that deficiency to resist payment.
The assessment date under a JCT contract is defined in the contract particulars - it is not simply the date the application is issued. Issuing an application on the wrong date, or failing to reference the correct assessment date, can mean the application is premature and the Construction Act machinery does not engage correctly. This is a frequently exploited technicality.
Under Section 111 of the Construction Act, an employer must issue a pay less notice not later than the prescribed period before the final date for payment. Under the JCT suite (post-LDEDCA 2009 amendments), this is typically 14 days before the final date for payment. Getting this date wrong - or failing to state it clearly in the application - makes it harder to enforce your entitlement if the employer attempts to withhold.
Many contractors issue payment applications whenever they feel like it, rather than on the contractually defined due date. Issuing late - even by a day - resets the payment notice machinery and can forfeit a month's entitlement. Issuing early can cause similar problems if the contract is strictly construed. The due date is a contract term; it must be respected.
The FitOut Insider Payment Application tool calculates every Construction Act date automatically from your contract data. Input your contract type, assessment date interval, the date the contract was executed and the agreed final date for payment formula - the tool calculates the due date, the final date for payment and the pay less notice deadline for every application in the contract cycle. No manual arithmetic. No risk of a miscalculated deadline.
The application itself is generated with correct Section 110A wording, confirming that the document constitutes a payment notice for the purposes of the Act. Gross value, retention deductions, net sum due and basis of assessment are all structured in the format that satisfies JCT requirements. The pay less notice deadline is stated clearly in the document - removing any ambiguity that an employer might later exploit.
The tool also maintains a history of all applications issued under a contract. Application numbers are sequential and consistent. Prior applications and amounts certified are tracked, so cumulative values and deductions are always correct. When you go to adjudication - and on disputed contracts, the question is when, not if - your payment application history is a complete, consistent, correctly dated record that will withstand scrutiny.
Auto-calculated dates. Correct notice wording. Every time.
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