Late payment is one of the biggest threats to small construction businesses in the UK. Across all sectors, it costs the economy an estimated £11 billion a year and leads to about 14,000 business closures a year, or 38 a day, according to the Government's March 2026 response to its late payment consultation.
Before you sign a subcontract or start work on a new project, there are several practical steps you can take to assess whether a main contractor or developer will actually pay you on time.
1. Check Companies House Filings
Every UK company must file accounts with Companies House. These filings are free to access and reveal a lot about a contractor's financial health:
- Accounts filing history. Are they filing on time? Late filings can signal cash flow problems or poor management.
- Balance sheet. Look at net assets. Negative net assets means the company owes more than it owns.
- Trade creditors. A high trade creditors figure relative to turnover may indicate they're slow to pay their supply chain.
- Cash at bank. Low cash reserves combined with high creditors is a red flag.
You can search any company for free at Companies House. Our register of 229 UK construction failures shows the last accounts each failed firm filed before it went under.
2. Use the Government's Payment Practices Reporting
Large companies must report their payment practices twice a year. From 6 April 2025, a company has to report if, on its last two balance sheet dates, it exceeded two of these three thresholds: £54 million turnover, £27 million balance sheet total and 250 employees (GOV.UK guidance). The reports are free to view on the Check Payment Practices service and include:
- Average time to pay invoices
- Percentage of invoices paid within 30 days
- Percentage of invoices not paid within agreed terms
For financial years beginning on or after 1 April 2025, companies with construction contracts must also say whether they use retention clauses and, if they do, on what terms.
This is particularly useful for checking Tier 1 main contractors like Balfour Beatty, Kier Group or Morgan Sindall. Reports are filed by individual companies, not groups, so look for the subsidiary you'll actually contract with (Balfour Beatty's are filed by Balfour Beatty Group Ltd, for example). If the average payment time is 45 days or more, you know what you're getting into. Construction Rating's company pages show the latest figures where a report exists (how our signals work), and the payment league table puts every company we list side by side. Plug a contractor's payment days into the cash tied up calculator to see what a job would mean for your cash flow, and if you've already been paid late, the late payment interest calculator shows what you can claim.
3. Ask Other Subcontractors
The most reliable indicator of future payment behaviour is past payment behaviour, and the people who know this best are other subcontractors who've worked with the company.
Ask your network before you price. Were they paid the agreed amount, on time? How long did the final account take? Was retention released when it should have been?
4. Run a Credit Check
Commercial credit reports from providers like Creditsafe, Experian Business or Dun & Bradstreet give you a detailed financial picture including:
- Credit score and risk rating
- County Court Judgments (CCJs)
- Payment trend data
- Director history and linked companies
Prices vary by provider, and a single report is a small cost next to the risk on a six-figure subcontract.
5. Check for CCJs and Legal Actions
County Court Judgments are a matter of public record. If a contractor has several CCJs, it usually means more than one creditor has had to go to court to get paid. You can search the Register of Judgments, Orders and Fines for a small fee.
6. Look at the Contract Terms
Before signing, pay close attention to:
- Payment terms. 30 days is a fair benchmark. Anything over 60 days should raise questions. The Commercial Payments Bill would set a 60-day maximum in most business contracts, but on 14 October 2026 it was still before Parliament and not law.
- Pay-when-paid clauses. Under section 113 of the Construction Act these are ineffective unless a party further up the payment chain is insolvent, but they still appear in various forms. If your payment is conditional on the contractor being paid by their client, push back.
- Retention terms. How much is held back, and for how long? See our guide to retention.
- Set-off provisions. Can they deduct from your payment for alleged defects without proper notice?
7. Know Your Rights Under the Construction Act
The Housing Grants, Construction and Regeneration Act 1996 (as amended) gives you important protections:
- Right to regular interim payments, unless the work is specified or agreed to last less than 45 days. The parties can agree the interval; if the contract is silent, the statutory Scheme for Construction Contracts applies, with a default period of 28 days.
- Right to a payment notice specifying the amount due
- Right to suspend work for non-payment (with proper notice)
- Right to adjudication for payment disputes
If a contractor's standard subcontract tries to override these protections, that's a warning sign about how they treat their supply chain. Our guide to subcontractor rights on late payment explains each one.
Bottom Line
Checking a contractor's payment reliability takes about an hour of research but can save you months of chasing invoices. Combine Companies House data, payment practices reports, credit checks and what other subcontractors tell you to build a complete picture before you commit.
The construction industry won't fix its late payment culture until subcontractors start making informed decisions about who they work for. Your due diligence is part of that change.
Construction Rating lets subcontractors review the main contractors they work for. If you've worked for one, add your experience.