UK government unveils toughest crackdown on late payments to small businesses | The IndependentNotifications can be managed in browser preferences.Jump to contentIndependentSwipe for next articleIndependent Bulletin homepageDownload our appAllNewsSportCultureLifestyleJonathan BunnTuesday 24 March 2026 01:32 GMTThe reforms are set to create the strongest laws on late payments among G7 nations (Reuters/Toby Melville)The UK government has unveiled its toughest crackdown on late payments to small businesses in over 25 years, aiming to prevent 1,000 monthly closures and an £11 billion annual economic cost.The reforms will grant enhanced powers to the Small Business Commissioner, enabling investigations into poor payment practices, dispute adjudication and the imposition of fines on persistent offenders.New measures include a 60-day cap on payment terms for all large firms when settling invoices with smaller suppliers, making these laws among the strongest in G7 nations.A mandatory interest rate of 8 per cent above the Bank of England base rate will be introduced for late payments, alongside compensation for affected businesses.The government also plans to ban the withholding of retention payments under construction contracts, a move welcomed by ministers and the Small Business Commissioner as "game-changing".In fullGovernment unveils ‘game-changing’ payment law reforms in bid to protect small businessesThank you for registeringPlease refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in