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UK Law change encourages prompt invoice payments within the construction sector
Posted 17 August 2011 | 
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Changes to the Housing Grants, Construction and Regeneration Act 1996 (HGCR) from the 1st October this year will result in several changes that construction contractor procurement and finance staff must act upon; some of the key changes include:
• Construction contracts need no longer be in writing thus even oral contracts can now use the Act;
• The main contractor can no longer make payments to sub-contractors conditional on his own payment by the end customer;
• Once money is due, the payer has five days to issue a payment notice with the final amount owed. If they do not, the supplier can issue default notice for the amount it believes is owed. If the payer believes the default notice claims too much money, it has seven days to issue a ‘pay less notice’. Failure to issue this notice within a week will result in it being forced to pay whatever amount the supplier claimed in its default notice.
This last point is key as until now, there has been no penalty for those who delayed payment.
by M Roper | 17 August 2011
