Story perspectives

UK Reforms Target Late Payments to Small Businesses

3/24/2026

Summary

Story summary

The UK government will implement reforms to curb late payments to small businesses, delivering the toughest measures in over 25 years.
The Small Business Commissioner will gain enhanced powers to investigate payment issues and impose fines on offenders.
The reforms set a 60-day cap on payment terms for large firms and mandate interest on late payments at 8% above the Bank of England base rate.
The measures ban retention payments in construction contracts.
Business Secretary Peter Kyle emphasized the urgency of addressing this issue.

History

Historical Context

The Late Payment of Commercial Debts (Interest) Act was enacted in the UK in 1998 to allow businesses to charge interest on overdue payments, addressing cash flow issues for small enterprises. Recent reforms echo this historical effort, as the UK government implements stricter measures to protect small businesses from late payments by larger firms, reinforcing a commitment to fair payment practices and economic stability.

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Story summary

The UK government will implement reforms to curb late payments to small businesses, delivering the toughest measures in over 25 years.
The Small Business Commissioner will gain enhanced powers to investigate payment issues and impose fines on offenders.
The reforms set a 60-day cap on payment terms for large firms and mandate interest on late payments at 8% above the Bank of England base rate.
The measures ban retention payments in construction contracts.
Business Secretary Peter Kyle emphasized the urgency of addressing this issue.

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