JCT Retention Recovery: How to Stop Main Contractors Keeping Your Final Profit

Retention is one of the most contentious commercial practices in the UK construction industry. On a typical commercial project, 3% to 5% of your gross valuation is deducted from every interim payment certificate.

For most trade subcontractors, that 5% represents your entire profit margin. If you don’t enforce your JCT release mechanisms, you risk losing it completely.

The Two-Stage JCT Release Mechanism

Under standard JCT subcontract terms (including DBSub/C and SBCSub/C), retention must be released in two distinct stages:

• Initial 50% Release: Due within the payment cycle following the issue of the Practical Completion statement for the main contract works.
• Final 50% Release: Due following the issue of the Certificate of Making Good Defects (usually 6 to 12 months after project completion).

The Real Financial Danger: Upstream Insolvency

The greatest risk to your cash flow is main contractor insolvency.

Unless your subcontract explicitly incorporates JCT Clause 4.18.2 (requiring retention monies to be placed into a separate, dedicated Retention Trust Account), your money sits in the main contractor’s general commercial bank account.

If the contractor goes into administration, your retention is absorbed by administrators to pay off secured bank debt. As an unsecured creditor, your business stands at the back of the queue and will rarely see a single penny returned.

How I Help You Protect Your Cash Flow

Never sign a subcontract that leaves retention release open-ended or linked to arbitrary project milestones. Ensure your contract terms include clear release dates and enforceable trust protections before you mobilise on site.