Retention on variations and loss and expense
One of these is work valued and one is money reimbursed, and treating them the same is a small error that repeats every month.
QScope Team · 21 January 2026 · 4 min read
A variation is work. It is instructed, valued and certified in the ordinary way, and retention is deducted from it exactly as it is from the measured works. There is nothing special about it.
Loss and expense is different in kind. It is reimbursement of loss the contractor has actually incurred because of a relevant matter. It is not the value of work executed.
Why that distinction affects retention
Retention is security that the contractor will return and make good defective work. There is nothing defective about reimbursement of a prolongation cost, and nothing to come back and fix.
Deducting retention from loss and expense therefore withholds part of a reimbursement as security against a risk that does not exist in relation to it.
What the contracts say
Practice varies and the contracts are not always explicit. Where the contract defines what retention applies to by reference to the value of work properly executed and materials on site, loss and expense sits outside that definition on its face.
Where the wording is broader, or the amount is simply added to the contract sum without distinction, the position is arguable. It is worth settling in correspondence when the first ascertainment is made rather than discovering the disagreement at the release.
The same question on other lines
- Fluctuations. Usually treated as an adjustment to the value of work, and therefore retained upon.
- Dayworks. Work executed, retained upon in the ordinary way.
- Advance payments. Not value of work executed. Retention normally does not apply, and the advance is recovered separately.
- Liquidated damages. A deduction, not a payment. Retention has nothing to do with it.
Getting it right in the certificate
The practical answer is to keep the lines separate in the valuation so the retention calculation applies to the right base. A certificate that shows the works, the variations and the loss and expense as one number cannot demonstrate which of them retention was taken from.
That transparency matters more than the amount. A retention figure that can be traced to its components is one that survives a query; a single deduction from a single total is one that invites the query in the first place.
QScope lets you set a zero retention rate on an individual variation, so loss and expense can be certified without a deduction that does not belong.