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Late Payments Bill gains momentum for small businesses

Roger Eddowes

CREATED BY ROGER EDDOWES

Published: 18/06/2026 @ 09:00AM

#LatePaymentsBill #SmallBusinessProtection #TighterPaymentTerms #FirmerEnforcement #PressureOnLargerFirms #PayOnTime

The Late Payments Bill is progressing through Parliament, and small businesses may finally receive stronger protection against slow payers. It introduces tighter payment terms, firmer enforcement, and greater pressure on larger firms to pay on time ...

The Late Payments Bill receives widespread support as small businesses push for fairer payment practices

The Late Payments Bill receives widespread support as small businesses push for fairer payment practices

The Late Payments Bill is now advancing through Parliament, and that matters because overdue payments have long been a major concern for some of my smaller clients. For many, the problem is not just an inconvenience; it is a direct hit to their cash flow, with invoices unpaid while staff, suppliers, and tax bills still need to be paid.

What makes this legislation notable is that
it does more than signal concern!

It points towards clearer late-payment legislation, including tighter payment terms for large companies dealing with smaller suppliers, and a stronger expectation that money should move through the economy at a sensible pace. We'll see fewer long waits and less ambiguity about when payment is due.

The proposed changes also signal a shift in tone. Rather than relying mainly on goodwill and reminders, the Late Payments Bill gives the Small Business Commissioner a more active role, with powers that could help tackle persistent offenders.

I think giving the regulator teeth is a very good idea, as asking politely rarely changes behaviour on its own.

There is also a broader commercial logic here. When large businesses extend payment terms too far, they do not simply create frustration; they push risk down the supply chain. Smaller firms often absorb that pressure first and then have to spend valuable time chasing invoices rather than focusing on growth, hiring, or investment.

The construction sector is also under scrutiny!

There are plans to curb retention practices that can leave subcontractors waiting far too long for money they have already earned. I believe this matters because retention has often been treated as routine, even when it places a heavy burden on smaller firms that are least able to bear it.

The rationale behind the Late Payments Bill is encouraging, as it treats late payment as a structural issue rather than a minor administrative oversight. If it delivers as I think it will, it could provide real relief for small businesses' cash flow and reset expectations about how quickly business invoices should be settled.

The real test will be whether the Late Payments Bill changes habits as well as rules.

Until next time ...


ROGER EDDOWES
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#LatePaymentsBill #SmallBusinessProtection #TighterPaymentTerms #FirmerEnforcement #PressureOnLargerFirms #PayOnTime

About Roger Eddowes ...

Roger Eddowes 

Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

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