Payment due date in the construction industry
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The 'payment due date' and the 'final date for payment' should not be confused.
Please refer to the defiinition contained in Section 110A(6) of the Housing Grants, Construction and Regeneration Act 1996 'payment due date' means 'the date on which the payment is due' and not the date on which the payment process is invoked. The 'payment due date' is the date by which the payee should receive payment.
The 'final date for payment' is the date after which the payee can give notice under Section 112 of the Act to suspend performance of the contract because the payee has not received payment.
Under The Scheme for Construction Contracts, if a construction contract fails to provide an adequate mechanism for determining when a payment becomes due, the payment shall become due, that is, payable on the later of 7 days after the [assessment date] or the making of a claim by the payee. The 'final date for payment' is 17 days after the date that payment became due.
Moreover, under the Late Payment of Commercial Debts (Interest) Act 1998 the 'payment due date' and not the 'final date for payment' will be an 'agreed payment day' from which statutory interest will begin to run.
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