Pay less notices explained: s.111, deadlines, and what to do when one lands

Published 13 July 2026 · Updated 10 October 2026 · VariationFlow

A plain-English guide to pay less notices under the Construction Act for UK subcontractors: what section 111 requires, when a pay less notice must be served, what makes one invalid, the “smash and grab” adjudication that follows a missed notice, and how to protect your applications.

You applied for £84,000. The payment certificate said £61,000. Then, two days before the money was due, an email arrived knocking another £18,000 off for “contra-charges and defective work”. Whether that deduction is lawful, or whether you are entitled to the full certified sum regardless, comes down to one document and one deadline: the pay less notice.

What is a pay less notice?

A pay less notice is the formal notice, required by section 111 of the Housing Grants, Construction and Regeneration Act 1996 (as amended), that a payer must serve if it intends to pay less than the “notified sum” for a payment cycle. It is not a negotiating letter or a polite heads-up, it is a statutory precondition. No valid pay less notice, no right to pay less. The Act applies to almost every UK construction contract, and this part of it cannot be contracted out of.

The “notified sum” is whatever the payment notice for that cycle says is due, and if the payer never issues a payment notice, your own payment application can become the notified sum by default. That is why a clean, on-time application every single period is the most commercially protective habit a subcontractor can have: it sets the number the payer must either pay or formally notice against.

The deadline that decides everything

A pay less notice must be served no later than the “prescribed period” before the final date for payment. Your contract sets that period; where the contract is silent, the Scheme for Construction Contracts fills the gap with seven days before the final date. Serve it a day late and it is void, the notified sum is payable in full, whatever the payer thinks of the account.

• Check the sub-contract first: the prescribed period is whatever it says, and JCT and NEC sub-contracts each set their own.
• If the contract says nothing, the Scheme default applies: no later than 7 days before the final date for payment.
• The notice must come from (or on behalf of) the payer named in the contract, a notice from the wrong entity is vulnerable.

What a valid pay less notice must contain

• The sum the payer considers due on the date the notice is served, which can be zero, but must be stated.
• The basis on which that sum is calculated, a line-by-line breakdown, not a bare figure.
• Service in time, and in the manner the contract requires: check the notices clause for required addresses or methods.

Adjudicators and courts look at substance over form: a clearly itemised email can qualify as a pay less notice, while a one-line “we are withholding £20,000” with no calculation is open to challenge. The test is whether a reasonable recipient could understand what is being paid, what is being deducted, and why.

Miss the notice, pay the sum: “smash and grab”

If there is no valid payment notice and no valid pay less notice, section 111 makes the notified sum automatically payable by the final date. If it is not paid, you can refer the non-payment to adjudication, commonly called a “smash and grab”, and the adjudicator does not value the works at all. The only questions are whether the application was valid, whether the notices were served in time, and whether the money was paid. Since the Court of Appeal’s decision in S&T (UK) Ltd v Grove Developments, the position is clear: the payer must pay the notified sum first, and only after paying can it start its own “true value” adjudication to argue the account.

A pay less notice has landed, what now?

• Check the date: count back the prescribed period from the final date for payment. Late means void. Check the final date itself first, though, because it moves. If the payer served no payment notice and you served a default notice of your own after the payer’s five days had run, section 110B(3) postpones the final date by the same number of days as your delay, and the pay less deadline moves with it. Serve your default notice eight days late and the payer gets eight more days to pay and eight more days to serve a pay less notice. A notice served before the payer’s deadline, which is what an ordinary interim application is, postpones nothing.
• Check the content: is there an itemised basis of calculation, or just a number?
• Compare it line by line against your application, identify exactly what has been cut and why.
• Scrutinise contra-charges: back-charges need substantiation, not a lump sum labelled “defects”.
• Dispute specific lines in writing straight away, silence reads as acceptance at the final account.
• Diarise the final date for payment: if the notice is invalid and the money does not arrive, the adjudication clock can start the next day.

Contra-charges deserve particular suspicion. A pay less notice is where unsubstantiated set-off tends to hide: supervision charges never mentioned before, “attendance” costs, defects you were never asked to remedy. A notice that is valid in form does not make its deductions right in substance, those are exactly the lines to contest.

You are a payer too

If you engage your own sub-subcontractors or labour-only gangs under construction contracts, the same regime binds you downstream. Intend to pay less than a notified sum, and you must serve your own pay less notice in time, or the full amount falls due. Diarise your prescribed periods on both sides of every contract.

Protection is built before the notice, not after

Every strong position at pay-less time is built weeks earlier: a valid application submitted on time each period, variations instructed and recorded in writing, day rates and photos captured while the work happened, and the contract’s payment dates tracked to the day. With that in place, a missed or flimsy pay less notice stops being a gamble and becomes arithmetic, the notified sum is the notified sum.

This is exactly what VariationFlow’s payment timeline does: it tracks the due date, the pay-less window and the final date for every valuation, and when a pay-less window closes with nothing served it flags the possible notified sum, with the caveat that periods are contract-specific and worth verifying against your executed terms. This guide is general information, not legal advice: for a live dispute of any size, involve a construction solicitor or claims consultant early. Adjudication runs on a 28-day clock, so speed and records win.