£8.75 Billion Was Paid Late in Six Months. The UK Wants a 60-Day Cap.

Payment terms have long been one of the cheapest sources of working capital a large company has. Stretch a supplier from 60 days to 90 and the buyer has, in effect, borrowed a month of spend at no interest. The UK is now close to writing a ceiling on that practice into law, and the numbers behind the bill show how much cash the current system has been quietly moving from small suppliers to their largest customers.

What the Bill Actually Does

The government introduced the bill in the House of Lords on May 19, describing it as the largest crackdown on late payments in over 25 years. Formally the Commercial Payments Bill, it places a duty on large firms to pay smaller suppliers on time and caps their payment terms at 60 days. Late payment would carry mandatory interest at 8% above the Bank of England base rate. The Small Business Commissioner would gain powers to investigate poor payment practices, adjudicate disputes and fine persistent late payers, with fines the government says could be worth tens of millions. Boards or audit committees of persistently late-paying large companies would have to publish an explanation of their performance and the steps they are taking to improve.

"Costing the UK economy £11 billion every single year, late payments choke growth," said Business Secretary Peter Kyle. The government also says late payment closes 38 businesses every day. The Small Business Commissioner's guidance adds that a large business found in breach would bear the cost of the adjudication or investigation, that small suppliers would gain a legal right to adjudication, and that a defined window for raising invoice disputes is proposed.

The core terms have survived scrutiny intact. At Lords committee stage, proposals to cut the cap to 30 days immediately or commit to a later move to 45 days were withdrawn or not pressed, according to a BCIS review of the committee stage. The 30-day limit for public authorities and the ban on construction retentions also stayed. The government cites figures showing 65% of retentions are released late and 20% are never recovered.

The Money Moving the Wrong Way

The most pointed data comes from companies' own statutory payment reports. According to Corpay's analysis of the Good Business Pays spring 2026 watchlist, companies on the list paid more than £8.75 billion of invoices late between June and December 2025, and more than £5 billion of that related to invoices with no reported dispute. In the same period, 122 companies reported paying at least 70% of their invoices late.

That undisputed figure is the one that should worry finance leaders. It is not cash held back over a quality complaint or a missing purchase order. It is cash a buyer could have paid and chose not to, which is exactly the behavior a statutory interest rate and public board explanations are designed to make expensive. The bill also gives suppliers a fixed-sum right where a purchaser raises a dispute late or without sufficient information, closing the most common route to delaying an undisputed invoice.

Support splits along the obvious line. In the government's consultation, 73% of micro businesses and 70% of small businesses agreed a 60-day maximum would be effective. Among large businesses, 44% agreed and 47% disagreed.

Why It Reaches Beyond the UK

The bill completed Lords report stage on September 15, with third reading set for October 20, the last Lords step before the House of Commons, according to Corpay's timeline of the bill. Royal Assent is most often expected in late 2026 or early 2027, and the government could shorten the 60-day limit later, but not for at least five years. Any company with smaller UK suppliers, including U.S. and European groups with UK subsidiaries, should assume the cap is coming.

The pressure on payment discipline is not confined to Britain. The 2026 Atradius Payment Practices Barometer for North America, released in September, finds late payment affects seven in 10 companies, overdue invoices average 23% of B2B receivables, and 43% of sales are made on credit terms. About one in three businesses report reduced cash availability. The UK is simply the first large economy to put a hard number on how long a big customer may wait.

For buyers, the cap compresses days payable outstanding on every affected supplier, a working capital cost that belongs in next year's plan rather than in a surprise at year end. For suppliers, it shifts leverage: an invoice that is accurate, delivered on time and documented can now carry statutory interest and an enforcement route. Both outcomes depend on the same thing, which is clean, timestamped invoice and dispute data.

The Playbook: Get Ready Before the Cap Lands

• Map every term over 60 days: List UK suppliers that qualify as smaller businesses and flag every contract above 60 days, so renegotiation happens on your timetable rather than the regulator's.
• Model the DPO hit now: Calculate how much cash the business loses if every affected supplier moves to 60 days, and build it into the 2027 working capital and funding plan.
• Raise disputes fast and fully: A late or vague dispute can trigger a fixed-sum entitlement for the supplier, so set internal deadlines for invoice queries and require the supporting detail up front.
• Put payment performance on the board agenda: Persistently late payers must publish explanations from the board or audit committee, so review payment reporting metrics before they become a public statement.
• If you sell, document everything: Suppliers that can show when an invoice was issued, received and queried are the ones that can enforce statutory interest, so tighten invoice delivery records and dispute logs.
• Watch the Commons stage: The bill still has to pass the House of Commons and details can change before it becomes law, so track scope definitions and commencement dates rather than finalizing contract templates too early.