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Last edited 07 Oct 2020
Withholding notice in construction contracts
The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) includes provisions to ensure that payments are made promptly throughout the supply chain. One of these provisions is that the client must issue a payment notice within five days of the date for payment, even if no amount is due.
If the client intends to pay less than the amount set out in the payment notice they must issue a pay less notice setting out the basis for their calculation. Before the Act was amended in 2011, this 'pay less notice' was known as a 'withholding notice'.
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