Businesses already have rights over late commercial payments, but the government’s proposed tougher regime is not yet a replacement for today’s rules. The Commercial Payments Bill is still going through Parliament.
According to Parliament’s bill update, Lords report stage is scheduled for 15 September 2026, following committee scrutiny in July. That is another examination stage, not a date when every proposal automatically becomes law.
When is a business invoice late under current guidance?
GOV.UK’s current guide says agreed payment dates are usually within 30 days for public authorities or 60 days for business transactions. Businesses can agree longer than 60 days if the arrangement is fair to both sides.
If no payment date was agreed, payment becomes late 30 days after the customer receives the invoice or the goods or services are supplied, whichever is later. Simply looking at the date printed on an invoice can therefore miss the relevant starting point.
Can suppliers already charge interest?
Yes. The government’s interest guidance describes statutory interest of eight percentage points above the Bank of England base rate for business-to-business debts. It says a different contractual interest rate prevents a claim for statutory interest; public-authority contracts have separate restrictions.
The contractual terms and circumstances matter. This is not a universal instruction to add the same percentage to every overdue bill, and a policy headline does not settle a disputed debt.
What would the Commercial Payments Bill change?
The government’s overview proposes a 60-day maximum with tightly limited exemptions, mandatory late-payment interest, and stronger Small Business Commissioner powers. It also proposes measures addressing poorly raised payment disputes and construction retentions.
The Commissioner would gain powers to investigate persistent poor practices and adjudicate certain payment disputes. Additional reporting requirements are intended to make large businesses’ interest liabilities and payment performance more visible.
Will the changes rewrite old contracts?
The government’s stated approach is a lead-in and transition period, with no retrospective application. Payments, contracts and disputes would be assessed under the rules relevant at the time. The final legislation and commencement arrangements—not the announcement alone—will determine the detailed position.
For an owner-manager, the useful distinction is between enforcing an existing right and preparing for a possible future obligation. Keeping the contract, delivery evidence, invoice receipt date and correspondence together helps identify which question actually needs answering.
Reporting basis: Parliament’s bill record and government guidance checked on 3 September 2026. Proposals may change during scrutiny. This is general policy reporting, not advice on recovering a particular debt.
Illustrative bookkeeping photograph; not evidence of an unpaid invoice. Photo by StellrWeb on Unsplash