Late payments tackling poor payment practices
The Department for Business and Trade has launched a new consultation on proposed legislative measures to address the issue of late payments to businesses.
Late payments can severely disrupt cash flow, prevent businesses from paying their own bills, and in some cases lead to business closure. Small and medium-sized businesses are particularly vulnerable, often lacking the cash reserves to absorb delays.
The consultation seeks views on a package of measures designed to ensure businesses are paid fairly and on time. It targets four key issues
- late payments – where businesses fail to pay invoices within agreed terms (typically 30 days if unspecified)
- long payment terms – agreements that extend payment deadlines beyond 60 days
- disputed payments – delays due to disagreements over goods or services
- unfair retention practices – especially in construction, where retained payments may be lost due to upstream insolvency or non-payment
An accompanying Options Assessment has been published to evaluate the impact of proposed changes.
This consultation is open to businesses, trade groups, and individuals to provide feedback on how best to reduce late payment risks and support SMEs’ cash flow stability.
The deadline for responses is 1159pm on 23 October 2025.
For more details and to respond, visit the consultation page on GOV.UK.
First published 5 August 2025
