You've done the work, submitted your application for payment, and now the main contractor is dragging their feet. Or worse, refusing to pay entirely. It happens far too often in UK construction, but you have more legal protection than you might think.
This guide covers your rights under UK law and the practical steps you can take to get paid.
Your Rights Under the Construction Act
The Housing Grants, Construction and Regeneration Act 1996 (commonly called "the Construction Act") was updated in 2011 and provides several key protections for subcontractors:
Right to Regular Payments
Unless the work is specified or agreed to last less than 45 days, you are entitled to interim payments (section 109). The parties are free to agree the amounts and intervals. If the contract is silent, the Scheme for Construction Contracts fills the gap, with a default period of 28 days. The contractor cannot simply pay you when they feel like it.
Payment Notices
The payer must issue a payment notice no later than 5 days after each payment due date, specifying the amount they consider due and the basis for the calculation (section 110A). If they want to pay less than the notified sum, they must issue a "pay less notice" explaining why. It must be given no later than the period before the final date for payment that your contract sets, or 7 days before that date if the Scheme applies.
Critical point: if no payment notice is issued, what happens depends on your contract. If it lets you apply for payment before the payer's notice is due, and you did, your application counts as the notice of the sum due (section 110B). Unless a valid pay less notice follows, that becomes the "notified sum" and must be paid in full. If your contract doesn't work that way, serve your own default payment notice promptly, because the final date for payment moves back by however many days late your notice is.
Right to Suspend Work
If a sum due under the contract hasn't been paid in full by the final date for payment, you can suspend all or part of your work (section 112). You must give at least 7 days' written notice stating your intention to suspend and the grounds. The period of suspension is added to your time for completion, and you can claim your reasonable costs.
Right to Adjudication
You can refer any dispute under the contract, including payment, to adjudication at any time (section 108). The adjudicator should be appointed and the dispute referred within 7 days of your notice, and the decision is due within 28 days of referral (extendable by 14 days with your consent, or longer if both sides agree). The decision is binding on an interim basis, meaning the contractor must comply while any further legal proceedings take place.
Practical Steps When Payment Is Late
Step 1: Document Everything
Before taking any formal action, make sure your paperwork is in order:
- Your subcontract (signed and dated)
- All applications for payment with dates sent
- Any payment notices or pay less notices received
- Emails and correspondence about payment
- Evidence of work completed (photos, progress reports, sign-offs)
Step 2: Send a Formal Payment Demand
Write a clear, professional letter (email is fine but send by post too) stating:
- The amount owed and the invoice or application reference
- The date payment was due
- That you intend to charge statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998
- A deadline for payment (typically 7 days)
Step 3: Charge Statutory Interest
Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge interest at 8% above the Bank of England base rate on overdue invoices. You can also claim a fixed sum for debt recovery costs:
- £40 for debts up to £999.99
- £70 for debts between £1,000 and £9,999.99
- £100 for debts of £10,000 or more
At present, if your subcontract sets its own rate of interest for late payment, you claim that rate instead of statutory interest.
Our free late payment interest calculator works out the interest and fixed sum on any late invoice and writes the claim letter for you. To see how a contractor says it pays before you take the work, check the payment league table, and use the cash tied up calculator to see how much of your money a package could tie up.
Step 4: Consider Adjudication
If the formal demand doesn't work, adjudication is usually the fastest and most cost-effective route. It costs significantly less than court action. You'll need a specialist construction adjudicator. The nominating bodies include the RICS, CIArb and the Technology and Construction Solicitors' Association (TeCSA).
Step 5: Enforce the Decision
If the contractor ignores an adjudicator's decision, you can enforce it through the Technology and Construction Court (TCC). Enforcement is usually straightforward: courts refuse only in narrow cases, such as where the adjudicator had no jurisdiction or there was a serious breach of natural justice.
Coming Changes: Not Yet Law
The Commercial Payments Bill was introduced in the House of Lords on 19 May 2026. As it stood after amendment in September 2026, it would:
- cap payment terms at 60 days in most business contracts (30 days where a public authority is paying), with some exemptions
- make any contract term that excludes or varies the right to statutory interest void
- ban cash retentions in construction contracts after a two-year transition period
- give the Small Business Commissioner new powers, including an adjudication scheme for payment disputes
On 14 October 2026 the Bill was still in the House of Lords and was not law, and its detail could still change. Until it is passed and in force, the rules above apply.
Prevention Is Better Than Cure
The best way to avoid payment problems is to check a contractor before you sign. Talk to subcontractors who have worked for them, check Companies House filings, and look at the government's payment practices data for larger companies. Each Construction Rating company page also shows financial signals from public records, including Gazette insolvency notices and payment practices figures (how they work).
If a contractor has a pattern of late payment, it's almost always better to walk away from the opportunity than to chase invoices for months after the work is done.
Construction Rating lets subcontractors review the main contractors they work for. If you've worked for one, add your experience.