Commercial Payments Bill: A Practical Guide

This article was first published in May 2026. It has now been updated following the publication of draft legislation (the Commercial Payments Bill (Bill)).

According to research carried out by the Small Business Commissioner, late payments cost the UK economy approximately £11b each year and contribute to the closure of around 14,000 businesses annually. As such, the government ran a public consultation from 31 July to 23 October 2025 and published its formal response on 24 March 2026, confirming a package of reforms designed to improve payment practices and act as deterrents to the worst offenders.

The reforms largely build on the existing statutory framework but strengthen it by restricting the ability of purchasers to contract out of key protections and introducing new procedural constraints. For an examination of the Bill's impact on the construction industry, please see our separate article.