The Commercial Payments Bill: what changes for UK businesses that get paid late
The biggest change to late payment law since 1998 is working its way through Parliament. Here is what it does, when, and what to do now.
What the Bill does
- Makes statutory interest mandatory. Today, interest at base rate plus 8% is a right that can be contracted out of with a "substantial remedy" clause. The Bill removes that: it applies to every commercial contract and cannot be waived.
- Caps payment terms at 60 days. Longer terms become unenforceable.
- Requires large businesses to report the statutory interest they owe and have paid, alongside existing payment-practice reporting. That turns late payment into a visible number.
- Strengthens the Small Business Commissioner, including powers to investigate and fine.
Where it is
Introduced in the House of Lords on 19 May 2026 and through committee stage on 21 July with technical amendments only. It still needs to complete the Lords, pass the Commons, and receive Royal Assent, and most of its provisions would then start on a date set by regulations. 2027 is the earliest realistic date for anything to bite.
What it means for suppliers
The interest is already yours under the 1998 Act. What the Bill changes is that customers will no longer be able to argue it away, and large customers will have to count it. The businesses that benefit most are the ones already claiming it when the Bill lands, with the history to show it.
What to do now
- Put the statutory sums on your statements. Every one.
- Claim them on invoices already paid late in the last six years; they remain owed.
- Check your terms: anything over 60 days will need to change.