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When a project bank account is needed
The Building Industry Fairness (Security of Payment) and Other Legislation Act 2020 received assent on 23 July 2020.
This Act will replace project bank accounts with a new trust account framework, delivering a more streamlined framework. Read about the new trust account framework.
The following information only applies to project bank accounts for certain government contracts tendered after 1 March 2018 up to 28 February 2021.
The head contractor is responsible for deciding whether a building and construction project requires a project bank account (PBA).
They need to consider several factors in making this decision, including whether:
- the project meets the threshold tests
- the work is classed as 'building work'
- they have suppliers or subcontractors
- their subcontractors are related entities
- their project is exempt from a PBA.
Sometimes, a contract variation or amendment may result in a project needing a project bank account, even if it didn't meet the criteria when the project began.
This guide explains all the factors that a head contractor must consider when deciding whether to set up a PBA for a project.