How to Dispute a Contractor's Invoice
Meta title: How to Dispute a Contractor's Invoice | RCB Design & Build Word count: ~760
Invoice disputes between homeowners and contractors are one of the most common sources of conflict in residential construction. The invoice arrives, something does not add up, and suddenly you are not sure whether you should pay, refuse, or just accept it and move on.
You do have rights — and a clear process to follow. Here is what you need to know.
The Most Common Types of Invoice Dispute
Overcharging beyond the agreed scope. The most frequent problem: the contractor has billed for work that was not included in the original quote and was never formally agreed as a variation. If additional work was not authorised in writing before it was carried out, its inclusion in an invoice is not automatically valid.
Work not completed. You are being charged for work that has not been done, or has only been partially done. This is a straightforward dispute over the factual position on site.
Defective work. The work has been carried out but to an unacceptable standard, and you are seeking to withhold payment or deduct the cost of making it good. This is a quality-related dispute and requires evidence — ideally an independent assessment.
Final account disputes. The contractor's final account figure differs significantly from the original quote, and no clear variation record supports the difference. This is common where a project has been run informally without written confirmation of changes.
Incorrect VAT. The contractor has charged VAT at the wrong rate. Under the VAT Act 1994 and VAT Notice 708, most residential new build is zero-rated, alterations and extensions on dwellings are charged at the five per cent reduced rate, and commercial or renovation work is charged at the standard twenty per cent rate. If you have been charged twenty per cent on works that qualify for the five per cent rate, that is the contractor's error and it must be corrected.
Your Legal Position
If you have a written contract, your rights and obligations are defined by that document. If you do not have a written contract, the position falls back on implied terms under the Supply of Goods and Services Act 1982: the contractor must carry out the work with reasonable care and skill (s.13), within a reasonable time (s.14), and at a reasonable price if none was agreed (s.15).
Your right to withhold payment for defective or incomplete work rests on the common law right of set-off — you can counterclaim the cost of making good against the sum invoiced. However, if your contract contains express payment provisions — including pay-less notice requirements under the Housing Grants, Construction and Regeneration Act 1996 — you must follow the contractual procedure exactly, or you may lose the right to deduct for that payment period.
The limitation period for a simple contract claim is six years from the date the cause of action arose (Limitation Act 1980 s.5). This applies to both your right to recover overpayment and the contractor's right to pursue unpaid invoices.
Practical Steps to Take
Step one: identify exactly what is disputed. Is it the scope (work not agreed), the quantity (overcharged for work done), the quality (defective), or the rate (VAT error)? Be precise before you communicate anything.
Step two: put it in writing immediately. Write a clear email or letter setting out the disputed items, the basis of your dispute, and what you are proposing (payment of the undisputed sum, withholding of the disputed amount pending resolution). Never deal with this verbally — written records are what courts and adjudicators rely on.
Step three: request supporting evidence. Ask the contractor to provide daywork records, delivery notes, or invoices from subcontractors that justify the disputed items. A professional contractor will have this.
Step four: get an independent opinion if needed. If the dispute is about defective work or quantum, commission an independent report from a surveyor or structural engineer. This gives you an evidence-based position rather than a word-against-word argument.
Step five: consider formal resolution. Adjudication under Part II of the Housing Grants, Construction and Regeneration Act 1996 — extended to domestic contracts by the Local Democracy, Economic Development and Construction Act 2009 — gives either party the right to refer a dispute to an adjudicator at any time. The process is fast (28 days to a decision) and relatively low cost. For claims under £10,000, the Small Claims Court is an accessible and proportionate route.
What You Cannot Do
You cannot withhold payment for reasons unrelated to the invoiced works. You cannot deduct sums without following the contractual notice procedure if your contract requires pay-less notices. And if you have already paid an invoice voluntarily, recovering that payment is significantly harder — so raise disputes before paying where possible.
At RCB Design & Build, we issue formal payment schedules and written variation orders before proceeding with any changes. That discipline eliminates most disputes before they have the chance to arise.