The UK Government has introduced the Small Business Protections Bill to Parliament, aiming to tackle late payments and poor payment practices. The Bill proposes a 60-day cap on payment terms, mandatory late payment interest at 8% above the Bank of England base rate, and stronger powers for the Small Business Commissioner to investigate and fine persistent late payers.

Main points

Late payment is not just an admin problem. According to the report, late payments are linked to 38 business closures every day, which shows how serious cash flow pressure has become for UK SMEs.

The proposed 60-day payment cap could change how large firms deal with smaller suppliers. For businesses that rely on steady cash flow, this may reduce uncertainty and make invoice chasing less damaging.

Mandatory interest could also shift behaviour ...