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Late payments crackdown

ended 19. May 2026

The Small Business Protections Bill will today be introduced to Parliament to back small businesses with the toughest late payment regime in the G7. There will also be stronger new powers for the Small Business Commissioner to investigate, adjudicate disputes and fine persistent late payers with potential penalties worth tens of millions. There will also be a new 60-day cap on payment terms for large firms, mandatory interest on late payments, and action to ban the practice of retentions in construction. Official announcement >> here <<, quote from Starmer below. 

Questions for Newspagers:

  • Does this bill go far enough in your opinion?
  • Do you feel like this government is “firmly” on your side as Keir Starmer claims?

Prime Minister Keir Starmer said: “Small businesses are the backbone of our economy - run by people who take risks, create jobs and keep communities going. This government is firmly on their side. Too many small business owners are spending hours chasing money they are owed and when payments don’t come through, the cost is personal. It’s about whether you can pay your staff, keep the lights on, or invest in your future. Today we’re changing that with the toughest action on late payments in a generation, so small businesses get paid on time and get the backing they need to grow, create jobs and serve their communities.”

5 responses from the Newspage community

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Editor
Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
On whether this bill goes far enough, it only goes far enough if it’s enforced in a way that actually changes behaviour. A 60-day cap on payment terms, mandatory interest, and giving the Small Business Commissioner powers to investigate, adjudicate and fine persistent late payers all sound strong on paper. But small businesses don’t need another ‘should’ or ‘guidance’, they need big firms to stop treating suppliers like an overdraft. A late payment crackdown is only a crackdown if it’s enforced, not just announced. The real test will be whether owners can challenge late payment quickly and safely, without needing a solicitor and without worrying they’ll be quietly dropped from the supplier list for making a fuss. If the fines are real, the process is fast, and loopholes are shut down, this could be a genuine shift. If not, it risks being a headline with the same old cashflow pain underneath.
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Editor
Adam Stiles
Managing Director at Helix Financial Partners
The people taking risks and creating jobs are being taxed to death. A plethora of industries in decline. No incentive for anyone to work hard or take said risks. The Prime Minister is could well be talking about HMRC than non-payers.
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Oli Garnett
Co-Founder at Something Familiar.
Small businesses hearing promises about “cracking down on late payments” is a bit like watching a burglar announce he’s launching a neighbourhood watch scheme. We’ve all heard this before. Half the UK economy runs on giant companies treating 30-day invoices like vague creative writing prompts. Meanwhile small business owners are sat refreshing banking apps like day traders, wondering if they can pay freelancers before EDF repossesses the office kettle. The bill sounds promising, but forgive us for not popping champagne until we see an actual corporate finance team panic for once. Right now “net 60” usually means “we’ll pay you whenever Mercury exits retrograde.”
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Colette Mason
AI Ethics Consultant at Clever Clogs AI
Thirty-eight businesses close every day because someone didn't pay them on time. For owners spending months in small claims court chasing a £4,000 invoice from a company turning over millions, this isn't news. Large firms have treated small suppliers as interest-free credit lines for decades.

The bill adds fines, mandatory interest and a 60-day cap but it still feels like there is an absence of real consequences. Sixty days of fighting to keep a struggling business afloat is not acceptable when the cause of the problem is not poor delivery but a bigger firm pulling up the ladder.

Will the commissioner's new powers actually be used, or will the fines that sound like tens of millions land as tens of thousands after appeals and exemptions whittle them down.

Legislation that protects small businesses only works if small businesses can access it without becoming amateur lawyers in the process, or ground out of existence because of continued delays.
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Tony Robinson OBE
Chair at Yorkshire in Business Limited
60-day payment and the continuance of unfair 45 to 120 days payment terms may become normalised, and the voluntary 'Fair Payment Code' may get as low a take up as its predecessors, e.g. the 'Prompt Payment Code.

There has never been a desire by the Government to stop 45-120 days unfair payment terms, even after Carillion or during Covid.

This is the major cause of the horrendous cash-flow logjam, which forces us to accept 'pay when paid' from our clients and customers.

Most self-employed people and micro-business owners want to pay other indie businesses within 14 days.

We were never in favour of legislation asthe biggest and most exploitative companies always find loopholes or choose to settle when caught, e.g., in data protection, taxation, employment law, labelling, privacy, and environmental law.

We asked for 30 years for the government to INFLUENCE a #PayIn30Days or less culture by not working with ANY company of ANY size which does not#PayIn30Days or less ALL the time.