After yesterday's mistake, here's an early Week 3.
Late Payment Culture – Who’s Still the Worst Offender in 2025?
👷 Brief Introduction
It’s the most stubborn illness in the UK construction industry—and it’s still thriving in 2025.
We’re talking about late payment.
Whether you’re a sole trader, a subcontractor, or a commercial manager overseeing million-pound packages, chances are you’ve had to chase money that should’ve been paid weeks ago. And for some, it’s months.
Despite legislation, “fair payment” campaigns, and well-meaning frameworks, construction remains the worst-paying sector in the UK. And most contractors know it’s not just about cash—it’s about control. If they delay your payment, they control your project, your programme, and your business health.
In this week’s issue, we’ll break down:
Why late payment persists in 2025
Who the repeat offenders are
Where the current laws fall short
And most importantly—what you can do now to protect yourself contractually and commercially
📚 Late Payment in 2025 – Still an Unfinished Job
🔹 The Scope of the Problem
According to the latest figures from Build UK and the government’s Prompt Payment Code monitoring:
1 in 5 subcontractors reports average delays of 30+ days beyond agreed terms
The construction industry still accounts for over 50% of payment-related disputes in UK small claims courts
A shocking 60% of SMEs say late payment puts them at risk of insolvency
And while some Tier 1 contractors have cleaned up their act (under pressure), many developers and larger firms still use payment as a tool to manage their cashflow—at your expense.
🔹 The Psychology of Delay
Let’s be clear:
Late payment is not always an accident.
It’s often:
A deliberate tactic to retain leverage
A test to see if you’ll push back
A sign the payer is under cash pressure—or just doesn't value your work
And because construction work is layered—main contractor, subby, sub-subby, supplier—it’s easy to push the delay down the chain.
By the time you raise a complaint, you're halfway through the next package—and now they’ve got leverage on you.
🔹 The Repeat Offenders (and the Telltale Signs)
Some names come up over and over again in industry circles. While we can’t name and shame here for legal reasons, the patterns are obvious:
🟥 Common Offenders:
Developers operating through SPVs (Special Purpose Vehicles) that shut down post-project
Tier 1 contractors with long supply chains and tight internal cash cycles
Client-side project managers who approve payments only after rechecking paperwork 3x
Contractors who insist on “pay when paid” logic (still alive despite legislation)
🚩 Red Flags:
Contracts without clear payment terms or final dates for payment
Excessive paperwork requirements to “release” payment
Unexplained shortfalls in certificates
Requests for variations with no agreed pricing—followed by radio silence
A culture of “we always pay… eventually”
🔹 Legal Landscape in 2025 – Still Not Good Enough
You’d think by now we’d have watertight laws in place. But while there have been some improvements, the reality is this:
⚖️ Construction Act 1996 (as amended)
Mandates clear payment notices and allows for adjudication
Still no mandatory payment timelines that are universally enforced
“Pay when paid” clauses are banned—but often get disguised in other language
⚖️ Prompt Payment Code (PPC)
Voluntary code with moral pressure but no real teeth
Only applies to firms who’ve signed it—and even they can lapse in enforcement
⚖️ Project Bank Accounts (PBAs)
Good in theory, but only required on some public projects
Rare in the private sector, where payment remains... creative
In short: you can adjudicate, but it’s time-consuming, risky, and many subcontractors feel they can’t afford the disruption.
🔹 Real-World Example: Subby Held Hostage
Let’s say you’re a £600k contractor on a commercial fit-out in Birmingham.
You complete the M&E install on time. The cert comes through, but it’s £25k short. The reason? “Still waiting for QS review of variation.”
You chase for 3 weeks. In the meantime, your next job is delayed because you’re waiting on this cash to pay your lads. The main contractor knows it.
When you raise a formal notice under the Construction Act, they remind you about the pipeline of work they’ve “earmarked” for your firm next quarter.
You back off. They eventually pay £15k… 2 months later. You write off the rest. Happens every day.
🔹 What You Can Do – Practical Defences
You can’t always stop someone from trying to delay payment.
But you can make it much harder—and much riskier—for them to get away with it.
✅ 1. Write Payment Terms in Plain English
Don’t rely on whatever is “in the main contract.” Make sure your subcontract or proposal includes:
A clear payment schedule
Agreed application deadlines
A firm final date for payment
A clause about interest on late payments
Use phrases like: “Payment is due within 14 calendar days from the valuation certificate. Interest of 8% above base rate applies on late balances.”
✅ 2. Push for Direct Client Payment or PBAs (Where Feasible)
Especially on public jobs, ask if a Project Bank Account is being used. If not, request one.
On private jobs, consider negotiating step-in rights or direct payment options—especially if you’re doing critical path work.
✅ 3. Keep a Bulletproof Paper Trail
Save all email chains, valuation submissions, and replies
Confirm verbal instructions in writing
Use delivery receipts for every invoice, application, or document sent
Store everything in a central folder—not just your phone
You’re not just working—you’re building your case.
✅ 4. Use Adjudication Notices as Leverage
Even if you never go through with it, a correctly worded Notice of Adjudication can get people moving. Most firms don’t want the PR or admin of dealing with a claim.
If you’re unsure, seek template support or legal advice—it’s cheaper than being unpaid.
✅ 5. Be Prepared to Walk (And Let Them Know That Early)
If you set boundaries at the start, you’re more likely to be respected.
Let clients know (politely) that your business isn’t a bank.
🔹 Who’s Getting It Right?
Let’s give some credit. A few firms and frameworks are trying to fix the culture:
SCAPE and Pagabo frameworks mandate payment within 19 days
Public sector clients (MoD, NHS, councils) using PBAs are seeing stronger compliance
Some main contractors now publish average payment times to stay in the PPC
But these are still the exception. If you’re working in the private sector, assume nothing is in your favour until you build the terms yourself.
🔨 Tip of the Week
Add this line to your next application for payment:
“This application is submitted in accordance with our agreed payment schedule. Any delay will trigger statutory interest and may lead to adjudication without further notice.”
It’s not hostile—it’s professional. And it gets attention.
⚠️ Quick FAQ / Myth-Buster
Myth: “You can’t charge interest unless the contract says so.”
Truth: Under the Late Payment of Commercial Debts (Interest) Act 1998, you’re legally entitled to 8% interest above the Bank of England base rate—even if it’s not in the contract.
📣 Call-to-Action
Have you ever had to write off thousands because chasing it just wasn’t worth the fight?
👉 Hit reply and share your late payment war story.
👉 How do you protect yourself now?
👉 Have you found a firm that actually pays on time, every time?
I’d love to feature real strategies in an upcoming edition: “Subbies Who Fought Back—and Won.”
Next week, we’re diving into variation abuse—how it’s crept back into fashion and what you can do to stop it becoming a loss leader on your next job.
Until then—read your payment clauses, chase with confidence, and remember: you’re a contractor, not a creditor.
— The Hard Hat Brief