Valuations & Certification in UK Construction

Interim valuations are how contractors get paid during a project. The process varies between contract forms, but the core idea is the same: agree what work has been done, apply for payment, and manage the certification and payment cycle. Getting this process right is the foundation of healthy construction cashflow.

What Is an Interim Valuation?

An interim valuation is a periodic assessment of the work completed on a construction project. It forms the basis for an application for payment. Valuations typically happen monthly and cover measured work, variations, materials on and off site, and any agreed preliminaries.

• Usually carried out monthly, aligned to the contract valuation date
• Covers measured work, variations, prelims, and materials
• May include retention deductions (typically 5%)
• Forms the basis for the application for payment

How Certification Works

Under most standard form contracts, the contract administrator or employer's agent reviews the application and issues a payment certificate. This certificate states the amount they consider to be due. The certificate then triggers payment deadlines under the Construction Act.

• The certificate is a formal assessment of the amount due
• Under JCT, the Architect or Employer's Agent issues interim certificates
• Under NEC, the Project Manager assesses the amount due
• If no certificate is issued on time, the applied amount may become due by default

Valuation Under JCT Contracts

Under JCT contracts (such as JCT DB 2016 or JCT SBC 2016), the contractor submits an application for payment before the due date. The contract administrator then has a set period to issue an interim certificate. The employer must then issue a Payment Notice or the certified amount becomes payable.

• Application submitted before the due date
• Interim certificate issued by the contract administrator
• Payment Notice due within 5 days of the due date
• Final date for payment typically 14 days after the due date

Valuation Under NEC Contracts

Under NEC4, the Project Manager assesses the amount due at each assessment date. The contractor can submit an application, but the PM's assessment is what determines the payment. The assessment date and payment period are defined in Contract Data Part 1.

• Assessment dates are defined in Contract Data
• Project Manager assesses amount due within the assessment period
• Payment is due within a set number of weeks after the assessment date
• Interest applies to late payments automatically

Common Valuation Problems

Many disputes and cashflow problems trace back to poor valuation processes. Common issues include late applications, incomplete supporting information, disagreements on measured quantities, and failure to track variations separately.

• Late or missed applications — delaying the entire payment cycle
• Incomplete backup documentation — giving the certifier reasons to reduce
• Unrecorded variations — losing money that was agreed verbally
• No tracking of retention — making final account reconciliation painful
• Poor records of materials on site — missing legitimate claims

How to Improve Your Valuation Process

The best way to improve cashflow from valuations is to make the process consistent, well-documented, and tied to clear deadlines. Digital tools can help by automating deadline tracking, storing backup documentation, and keeping a clear record of what was applied for vs what was certified.

• Set calendar reminders for every valuation and notice deadline
• Keep a live variation register linked to each valuation
• Track retention separately for each project
• Maintain a clear record of applied vs certified amounts
• Use software to generate compliant applications and track notices