Late Payment Rules 2026

Late payments continue to be one of the biggest pressures for growing businesses – tying up cash, taking up valuable time, and creating unnecessary uncertainty.

The Government has now introduced a new Bill aimed at tackling the issue more directly, in what’s being described as the most significant reform in this area for over 25 years. 

The proposals include a requirement for larger businesses to pay smaller suppliers within 60 days, alongside mandatory interest on overdue invoices at 8% above the Bank of England base rate. 

There are also plans to give the Small Business Commissioner stronger powers to investigate poor payment practices, resolve disputes and issue financial penalties where necessary. 

For many businesses, this should be a positive step forward - helping to improve payment behaviour and reduce pressure on working capital.

However, even with stronger legal protection, maintaining healthy cash flow still comes down to having the right processes in place internally.

As part of our Business & Tax Advisory services, we’re often helping clients take a step back and strengthen the fundamentals - including:

• more proactive credit control
• clearer, more consistent invoicing processes
• better visibility over debtor positions
• and straightforward, practical cash flow forecasting.

These are often simple changes, but they can make a meaningful difference - helping you stay in control rather than reacting to late payments when they arise.

If you’d like to sense-check your current approach, or explore how we can support your cash flow more proactively, we’d be happy to have a conversation. Call us on 01380 723692 or email us here.