The new UK payment rules

The Commercial Payments Bill

Introduced in the House of Lords in May 2026 — the most significant late-payment reform in over 25 years. Implementation no earlier than 2027.

60-day cap on payment terms

Maximum 60 days between invoice and payment, reducing to 45 days after a transition period. Only narrow exemptions are expected.

30-day verification window

Businesses must verify or dispute an invoice within 30 days of receipt. After that, the agreed payment clock runs and the invoice must be paid in full.

Mandatory statutory interest

All commercial contracts will carry a right to statutory interest at 8% above the Bank of England base rate on overdue amounts. This cannot be contracted out of.

New Small Business Commissioner powers

Spot-check powers, dispute adjudication, and fines for persistently late payers — potentially in the tens of millions of pounds.

Already in force

Portal reporting updates (April 2025)

Qualifying businesses now report the monetary value of late payments, and separately disclose the percentage of invoices unpaid because of disputes.

Directors' Report disclosures (financial years from January 2026)

Large companies — over £54M turnover, over £27M balance sheet, or over 250 employees — must report their payment practices in their audited annual reports.

The Fair Payment Code

A voluntary recognition scheme run by the Small Business Commissioner. Three tiers, awarded for two years at a time.

• Gold 95% of all invoices paid within 30 days.
• Silver 95% of all invoices paid within 60 days, including 95% of small-business invoices within 30 days.
• Bronze 95% of all invoices paid within 60 days.

How Paydance helps

• Track the 30-day window

  Paydance records when each invoice arrives, when it moves to checking, when it's approved, and when it's paid. The clock is visible to both sides.

• Keep a clear evidence trail

  Every document, note, and approval is recorded against the invoice — calm, ordered, easy to revisit when reporting time comes.

• Reduce dispute friction

  Questions are raised on the shared timeline, not buried in email. Both sides see the same state and the same evidence.

Paydance is not legal advice. It helps you keep payment work moving step by step — the rules above are summarised from public sources at the time of writing.