‘Our client says we haven’t made a valid application for payment’

In a recent case, 1st Formations Ltd v Lapp Industries Ltd [2025] EWHC 1526 (TCC), the court looked at whether the AFP for a payment on account was valid. In this case, the contractor stated that the sum due was £341,854.32 (including VAT), but the payment “requested on account” was £100,000 plus VAT. In addition, the sums were stated as provisional “subject to any agreed adjustment following assessment”. The paying party argued that the AFP was ambiguous and not in substance, form and intent an interim application for payment under the scheme.