Interim payment

In practice for trades

Interim payments are how any job longer than a few weeks should be paid. You apply for the value of work completed to a cut-off date, the payment falls due, and the cycle repeats. On construction contracts the timing is not purely a matter of negotiation, because the Construction Act gives most contracts a statutory payment framework of a due date, a payment notice and a final date for payment.

The valuation is where money is won and lost. An interim payment covers work in place, and usually materials delivered to site, minus retention and minus what was paid before. Trades who apply for a round figure instead of a measured valuation get their applications cut, because there is nothing to defend.

Apply on time, every time. A late application slips a whole cycle, which on monthly payments means waiting another month for money you have already spent on wages.

Worked example

A £30,000 job, valued monthly. By the end of month two, £18,000 of work is in place. Retention at 5% is £900, and £9,500 was paid in month one. The interim payment applied for is £18,000 minus £900 minus £9,500, which is £7,600.