UK Invoice Finance Regulatory and Product Timeline
This is a dated record of the laws, industry bodies and rule changes that shaped how UK invoice finance works today, from the 1976 incorporation of the factoring trade body and the Late Payment Act 1998 to the Commercial Payments Bill now before Parliament. Every entry links to its primary source: legislation.gov.uk, gov.uk, Parliament, Companies House or UK Finance's own records. Entries are added as the law changes, and corrected if a source shows they were wrong.
Compiled by Market Invoice · Late Payment of Commercial Debts Act 1998 · Days to pay by sector
16 March 1976
Association of British Factors incorporated
The trade body for UK factoring is incorporated at Companies House as Association of British Factors Limited (company 01249173). It becomes the Association of British Factors and Discounters in 1990 and the Factors and Discounters Association in 1996, as confidential invoice discounting grows alongside traditional factoring.
Source11 June 1998
Late Payment of Commercial Debts (Interest) Act 1998 receives Royal Assent
The Act creates a statutory right to interest on late payment of debts under commercial contracts for goods and services. The 2002 and 2013 regulations below amend it, and the 2026 reforms build on it.
Source1 November 1998
Statutory late payment interest starts, for small suppliers only
The first commencement order (SI 1998/2479) brings the Act into force only for contracts between a small business supplier (50 or fewer full-time employees) and either a large business purchaser or a UK public authority.
Source7 August 2002
Late payment rules extended and fixed compensation added
The Late Payment of Commercial Debts Regulations 2002 (SI 2002/1674) add fixed compensation on top of statutory interest: £40 for a debt under £1,000, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more. They apply to contracts made from this date. The same day, the fifth commencement order (SI 2002/1673) brings the 1998 Act into force for all remaining commercial contracts for goods or services, so statutory interest is no longer limited to small suppliers.
Source28 June 2007
Factors and Discounters Association becomes the ABFA
The Companies House record shows the Factors and Discounters Association name ending on this date and the company continuing as the Asset Based Finance Association Limited (ABFA), the name the invoice finance and asset based lending trade body kept until it moved into UK Finance.
Source16 March 2013
60-day cap on business payment terms and recovery costs
The Late Payment of Commercial Debts Regulations 2013 (SI 2013/395) implement EU Directive 2011/7/EU. Public authorities get a 30-day payment period, businesses a default 60 days unless a longer term is agreed and not grossly unfair to the supplier, and suppliers can claim reasonable recovery costs above the fixed sum. They apply to contracts made from this date.
Source26 March 2015
Small Business, Enterprise and Employment Act 2015 receives Royal Assent
Section 1 gives the government the power to make terms that ban assigning receivables ineffective. That power is what the 2018 anti-assignment regulations were later made under.
Source4 May 2016
Enterprise Act 2016 receives Royal Assent
Creates the statutory office of the Small Business Commissioner, giving small businesses a route to raise payment disputes with larger customers.
Source6 April 2017
Small Business Commissioner office established
The Enterprise Act 2016 (Commencement No. 4 and Appointed Start Date) Regulations 2017 (SI 2017/473) bring the statutory office of the Small Business Commissioner into existence. The advice and complaints functions follow on 1 October 2017, but 6 April 2017 is the appointed start date, so payment problems arising from this day onwards can later be taken to the Commissioner.
Source6 April 2017
Payment Practices Reporting duty in force
The Reporting on Payment Practices and Performance Regulations 2017 (SI 2017/395) require large UK companies and LLPs to publish a payment practices report twice a year, within 30 days of each 6-month reporting period ending.
Source1 July 2017
ABFA integrated into UK Finance
The Asset Based Finance Association becomes part of the new trade body UK Finance, which also takes on most of the work of the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Industry invoice finance statistics are published by UK Finance from this point.
Source1 October 2017
Small Business Commissioner advice and complaints functions start
The rest of Part 1 of the Enterprise Act 2016 comes into force. The Commissioner can now give general advice to small businesses and consider their complaints about payment matters with larger businesses.
Source24 November 2018
Ban on anti-assignment clauses in force
The Business Contract Terms (Assignment of Receivables) Regulations 2018 (SI 2018/1254) make void any contract term that prohibits or restricts assigning a receivable, directly relevant to invoice finance since it removes a common contractual block on factoring or discounting an invoice. Applies to relevant contracts entered into on or after 31 December 2018; financial-services contracts and several other categories are excluded.
Source5 April 2024
Payment Practices Reporting extended to 2031
The Reporting on Payment Practices and Performance (Amendment) Regulations 2024 (SI 2024/444) replace the 6 April 2024 sunset with 6 April 2031 and add reporting of payment values paid within 30 days, 31 to 60 days and after 60 days, plus payments late because of a dispute, for financial years beginning on or after 1 January 2025. They also define when a payment counts as made where a finance provider has paid the supplier early: when the finance provider is paid by the company, not when the supplier received the advance. So a supply chain finance programme cannot make a company’s reported payment times look shorter than its own payment to the funder.
Source3 December 2024
Fair Payment Code replaces the Prompt Payment Code
The voluntary Fair Payment Code becomes operational, administered by the Small Business Commissioner. Unlike the Prompt Payment Code it replaces, it requires reapplication every two years and awards Gold, Silver or Bronze status based on measured payment performance rather than a one-off sign-up.
Source24 February 2025
Mandatory 30-day public sector supply chain payment terms
The Procurement Act 2023 regime starts, after SI 2024/959 moved the commencement date from 28 October 2024. Section 68 implies a 30-day payment term into public contracts procured under the new Act, and section 73 implies the same term into every public sub-contract beneath them, whatever the tier (concession contracts, private utilities and schools excepted). A supplier waiting on a public sector invoice now has a statutory backstop on how long the money should take.
Source1 March 2025
Construction retention reporting added to Payment Practices Reporting
The Reporting on Payment Practices and Performance (Amendment) Regulations 2025 (SI 2025/75) require large companies to report on retention clauses in their construction contracts, including standard retention percentages and how retained sums are released, for financial years beginning on or after 1 April 2025.
Source30 July 2025
Government announces late payment legislative package
The government announces a legislative package to tackle late payment, including a proposed cap on payment terms between businesses, mandatory interest on late payments, and new powers for the Small Business Commissioner to fine persistent late payers and run spot checks. The public consultation on the measures opens the next morning, 31 July 2025.
Source23 October 2025
Late payment consultation closes
The public consultation on the late payment package, opened on 31 July 2025, closes for responses at 11:59pm. It set out eight proposals, including a 60-day maximum payment term that would fall to 45 days after five years, subject to further consultation.
Source24 March 2026
Government confirms 60-day payment terms cap
The government response to the consultation confirms a 60-day maximum payment term, "no earlier than 2027", with exemptions where both parties are large companies, where the purchaser is the smaller party, or where the goods or services are imported or exported.
It also confirms mandatory statutory interest at 8% above Bank of England base rate. The proposed later cut to 45 days is not being taken forward for now. All of this needs primary and secondary legislation, so none of it is in force.
Source19 May 2026
Commercial Payments Bill introduced in the House of Lords
The bill to put the 2026 reforms into law gets its first reading in the Lords. It carries the 60-day payment terms cap, mandatory interest at 8% above base rate, a ban on withholding construction retentions and new investigation, adjudication and fining powers for the Small Business Commissioner. Second reading followed on 9 June 2026, committee on 21 July and report stage on 15 September. It is still a bill, not law.
Source“The Commercial Payments Bill is before Parliament, but a bill is not law. The 60-day cap and mandatory interest only bite once it passes and is commenced, and the government has said the cap comes no earlier than 2027. Until then, the 1998 Act as amended in 2002 and 2013 is what a business can actually enforce.”
Methodology
Each entry is verified against a primary source: legislation.gov.uk, gov.uk, the Small Business Commissioner, the Parliament bills service, the Companies House register or UK Finance's own publications. Secondary summaries are not used as sources. Entries cover changes that materially affect how UK invoice finance is used, sold, or regulated, plus the history of the industry's trade body; general late-payment commentary that does not change a rule or duty is not included.
New entries are added to the underlying dataset as changes happen and the timeline is shown in date order. An existing entry is only changed when its primary source shows it was wrong or its citation did not support it.
This dataset is published under a Creative Commons Attribution 4.0 licence. You may reuse it with attribution to Market Invoice (marketinvoice.co.uk).
Cite this page
To reference this timeline, please credit MarketInvoice and link to this page:
Source: MarketInvoice, UK Invoice Finance Regulatory and Product Timeline, https://marketinvoice.co.uk/data/uk-invoice-finance-regulatory-timeline/ (accessed 2026-09-23).
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
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