(1) A principal contractor who has been served with a payment withholding
request must retain, out of money owed to the respondent, the amount of money
to which the payment claim relates (or the amount owed by the principal
contractor to the respondent if that amount is less than the amount to which
the payment claim relates).
(2) The amount is only required to be retained
out of money that is or becomes payable by the principal contractor to the
respondent for work carried out or materials supplied by the respondent to the
principal contractor as part of or incidental to the work or materials that
the respondent engaged the claimant to carry out or supply.
(3) The
obligation to retain money under this section remains in force only until
whichever of the following happens first--
(4) A
part payment of the amount claimed to be due under the payment claim removes
the obligation under this section to retain money to the extent of the
payment.