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Late Payments: Government Response to Consultation

24 March 2026

Proposing MP
Blair McDougall Lab
East Renfrewshire
Type
Written Ministerial Statement
Department
Department for Business and Trade
View on Parliament.uk -->

At a Glance

Issue Summary

The statement addresses the government's response to a consultation on late payments in business transactions.

Action Requested

The government is announcing reforms including strengthening the powers of the Small Business Commissioner, introducing maximum payment terms of 60 days, mandatory interest on late payments, and prohibiting retention deductions in construction contracts (subject to further consultation).

Key Facts

  • Late payments cost the UK economy £11 billion annually.
  • On average, each business owner wastes 86 hours per year chasing invoices.
  • The Small Business Commissioner's powers will be strengthened for investigation, fines, and adjudication.
  • Maximum payment terms of 60 days are proposed with mandatory interest on late payments.
  • There is a prohibition on retentions in construction contracts (with further consultation planned).
  • Over 850 responses were received during the consultation period.
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