Most of the "crackdown" isn't law yet. The 60-day cap on payment terms, interest you can't contract out of and the ban on construction retentions are all in the Commercial Payments Bill, which is still going through Parliament. The change that has happened is in reporting: from 2026, large companies have to put their supplier payment record in their directors' report, and your invoices are part of that record. Your right to charge statutory interest on a late invoice is the same as it was, and it's worth using now.
In this article
The short version
- Maximum 60-day terms, interest that contracts can't replace and the retentions ban sit in the Commercial Payments Bill, which still has to pass the Commons.
- For financial years starting on or after 1 January 2026, large companies must put supplier payment data in their directors' report, and your invoices count in it.
- Large customers' supplier terms can still replace statutory interest with a lower rate if it's a substantial remedy, and where a contract is silent the statutory 11.75% applies.
- A £6,400 service invoice paid 15 days late carries £30.90 of statutory interest plus £70 of compensation, a claim of £100.90.
- Check how large customers pay on GOV.UK, attach the PO and service certificate to every invoice, and claim interest on every late invoice.
What is law now and what is only proposed
Headlines about the "toughest crackdown in a generation" run announcements, bills and law together. For planning cash flow, the first three rows below are the rules you can rely on this year.
| Measure | Status in October 2026 |
|---|---|
| Statutory interest at 8% over base rate, plus £40, £70 or £100 compensation per invoice | Law and in force |
| Large companies report payment performance every six months | Law and in force |
| Large companies include payment data in their directors' report | In force for financial years starting on or after 1 January 2026 |
| 60-day maximum payment terms | Proposed in the bill; government says no earlier than 2027 |
| Interest that can't be replaced by a contract term | Proposed in the bill |
| Ban on retentions in construction contracts | Proposed in the bill; timing still to be consulted on |
| 45-day maximum terms | Dropped from the plans |
The Commercial Payments Bill finished its Lords Report stage on 15 September 2026 but still has to complete its Lords stages, pass the Commons and receive Royal Assent, and each measure then needs a start date.
What it means for a contractor today
Most fire, security and field service firms are well below the large-company size, so the reporting rules ask nothing of you. You show up in your customers' reports instead. When a large facilities management company or main contractor pays your invoice at day 75 on 60-day terms, that payment counts in the "not paid within agreed terms" figure its directors now sign off. For a customer with a calendar year, the first of those reports lands in 2027, covering payments being made now.
That gives their accounts payable team a reason to clear clean invoices on time, and a reason to query incomplete ones. An invoice without the purchase order number or the service certificate is the easiest one to park.
On interest, today's law is weaker than the headlines suggest. You can already claim 8% above the Bank of England base rate, which is 11.75% a year with the base rate at 3.75%, plus fixed compensation. But a large customer's supplier terms can still swap statutory interest for their own lower rate, and if you signed those terms, that rate usually applies, as long as it counts as a substantial remedy under the Act. If the contract says nothing, the statutory rate applies automatically.
Take a £6,400 invoice for a six-monthly fire alarm service, paid 15 days after its 60-day due date. Statutory interest is £6,400 × 11.75% ÷ 365 × 15 = £30.90, and the compensation band for that size of invoice is £70, so you can claim £100.90.
What would change if the bill passes
If the bill becomes law in the form it was introduced and each part is switched on, three changes would reach contractors directly. A larger customer buying from a smaller firm couldn't set terms longer than 60 days, with the size line set later in regulations. Contracts could no longer replace statutory interest with a lower rate. And a customer that raised a dispute late, or without enough detail, would owe you a fixed sum.
Installers on building projects should also watch the retentions ban. As drafted, new retention clauses would stop working after a two-year transition and existing ones after three, but the government has said it will consult on timing. Until then, the retention in your current subcontract stands.
What to do now
None of this depends on the bill passing.
- Check how your largest customers pay. Large companies publish their average days to pay and how many invoices they pay after 60 days, and anyone can search those reports on GOV.UK.
- Read the interest clause in each large customer's supplier terms, so you know what you can claim when they pay late.
- Put your payment terms in days on every quote and invoice, and attach the purchase order number, site address, visit date and service certificate.
- Claim statutory interest and compensation when an invoice goes past its due date, every time, so customers can see that paying you late has a cost.
- Move recurring maintenance and monitoring charges to direct debit where the customer agrees, so you set the collection date instead of waiting for their payment run.
Steps 4 and 5 tend to slip first when the diary fills with site visits. Adfin can collect maintenance contracts by direct debit, with the amount varying from visit to visit under one mandate, and send customers who pay invoice by invoice a link to pay by bank or card. For anything overdue, Adfin adds statutory interest from the due date, updating the payment link as it builds, and you can waive it for customers you'd rather keep sweet. Its AI agents chase overdue invoices by email, SMS or WhatsApp on a schedule you set, within rules you approve.
Common questions
Is the 60-day maximum payment term law yet? No. It's in the Commercial Payments Bill, which is still in Parliament, and the government has said maximum terms will start no earlier than 2027.
Do I have to report my payment performance? Only if your company is large. Most fire, security and field service contractors are suppliers whose payments appear in their customers' reports.
Can I charge statutory interest on late invoices today? Yes, at 8% above base rate plus £40, £70 or £100 per invoice, unless your contract with that customer sets its own interest remedy instead.
Has the 45-day limit been dropped? Yes. The government said in March 2026 that it isn't taking the 45-day step forward now, though it may revisit it.
When will the retentions ban start? There's no start date. The bill would phase retentions out over two to three years, but the government is consulting on timing and the bill isn't law.
Would the 60-day cap cover me as a subcontractor? It would depend on relative size: it would cover a larger main contractor paying a smaller installer, but not two large firms dealing with each other or a smaller firm buying from a larger one.
Sources
- UK Parliament - Commercial Payments Bill [HL], Parliamentary Bills (accurate as of October 2026) https://bills.parliament.uk/bills/4128
- GOV.UK - Late payment consultation: time to pay up, government response (accurate as of October 2026) https://www.gov.uk/government/consultations/late-payments-tackling-poor-payment-practices/outcome/late-payment-consultation-time-to-pay-up-government-response-web-version
- legislation.gov.uk - The Companies (Directors' Report) (Payment Reporting) Regulations 2025, S.I. 2025/1152 (accurate as of October 2026) https://www.legislation.gov.uk/uksi/2025/1152/made
- GOV.UK - Check when businesses pay invoices (accurate as of October 2026) https://www.gov.uk/check-when-businesses-pay-invoices
- GOV.UK - Late commercial payments: charging interest on commercial debt (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
- Bank of England - The interest rate (Bank Rate) (accurate as of October 2026) https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
