The UK government's late-payment reforms have reached Parliament, but a Bill is not the same as a new right you can already enforce. Keep proposed changes separate from the commercial late-payment rules currently available when deciding what to put on an invoice or demand from a customer.

This update is checked to 16 September 2026. The legislation may change as it progresses, so check the official status before relying on a proposal in a contract or dispute.

Where the reforms stand

The Parliamentary record for the Commercial Payments Bill shows a version amended on Report, dated 15 September 2026. Its subjects include commercial payment terms, late-payment interest, construction retentions and wider powers for the Small Business Commissioner.

The government's Bill overview sets out the intended reforms. The package includes restrictions on long payment terms, stronger treatment of late-payment interest and enforcement powers. These proposals concern business payments; they should not be presented as a new automatic charge on every householder's unpaid invoice.

Check the final wording, territorial scope and commencement dates when legislation is passed. An announcement, a Bill introduced to Parliament and a provision actually in force are different stages.

What can apply to a business debt now

Existing rules can allow statutory interest on qualifying late commercial debts at eight percentage points above the Bank of England base rate. Contract terms can affect the available remedy, so check the agreement before adding a charge. GOV.UK explains the current interest rules.

Fixed compensation may also be available:

• £40 for a debt below £1,000;

• £70 for a debt from £1,000 to £9,999.99;

• £100 for a debt of £10,000 or more.

Read the official debt-recovery cost guidance and check eligibility. These commercial rules do not automatically apply to a domestic consumer buying work for their own home.

Start with the agreement and the due date

Before chasing, put the quote or contract, invoice and payment record together. Check the customer's legal identity, agreed terms, date the invoice was received and whether any payment or credit has reduced the balance.

For qualifying commercial transactions, GOV.UK explains when a payment becomes late, including where no date was agreed. Do not assume that the day you sent a reminder is the date interest begins.

If you are working under a construction contract with applications, payment notices or retentions, get advice on that contract's procedure. A general overdue-invoice template may not cover the steps required.

Make the next reminder specific

A useful reminder states the invoice number, work, balance, due date and what response you need. Ask for a payment date. If the customer raises a concern, ask which item is disputed and keep a written record of the response.

Do not refer to proposed penalties as though you can impose them yourself. Avoid adding an unexplained “late fee” or threatening action you have not checked. Accurate, proportionate wording gives both sides a clearer basis for resolving the payment.

The unpaid-invoice guide provides a practical sequence. Take advice before formal proceedings, especially if the amount is disputed, the debtor may be insolvent or the contract has a specific dispute process.

Improve the records before the next job

Agree payment terms before starting. Confirm the invoice contact, purchase-order requirements and any staged payments. Keep approvals for changes with the job, then send an accurate invoice when the agreed billing point is reached.

These steps do not guarantee payment. They do give you a clearer record if you need to explain what is owed and why.

TradePilot can keep the customer, quote, job and invoice connected and prepare a reminder for you to review and send. It does not chase on a schedule, contact customers automatically or decide which legal charges you may claim.

Written by Chris, founder of TradePilot.

This is general information, not legal advice. Official sources and Bill status checked on 16 September 2026. Recheck the current law before taking formal action.