What is a Payment Notice?

A Payment Notice is the payer's written statement of the sum it thinks is due for the round, served no later than 5 days after the Due Date, the date the payment obligation is fixed by the contract. It must show the sum and its workings, so the payee can follow how the figure was reached. Served in time, that sum becomes the Notified Sum, the amount that legally must be paid by the Final Date For Payment, the last day the money can lawfully arrive, unless the payer later serves a valid Pay Less Notice cutting it down. Miss the 5 day window and the payee's application can become the Notified Sum instead, so the payer loses control of the figure. The sum can be zero, but even then show how zero was reached: serve one every round, with workings.

A groundworks subcontractor on a distribution warehouse has a Due Date on the 28th, so its application for £62,000 is in that Monday. The contractor's quantity surveyor thinks two areas are over measured, so by Friday the 2nd, inside the 5 days, she serves a Payment Notice for £54,000 with the deductions line by line. In on time, that becomes the Notified Sum and must reach the subcontractor by the Final Date For Payment, not the £62,000 applied for. Had she served nothing, the £62,000 would have stood by default.