UK Late Payment Policy Statistics 2026
The Small Business Commissioner handled 591 enquiries and received 29 complaints in 2024 to 2025, and says £10 million has been paid to small businesses with its help since it was set up in 2017. The Small Business Commissioner's July 2025 research estimates that 14,000 businesses close each year because of late payment. The Prompt Payment Code has been replaced by the Fair Payment Code, which had 841 awardees when we read the Commissioner's site on 1 November 2026.
Key statistics
Estimated annual cost of late payment to the UK economy (businesses are owed about £26bn in late payments at any given time). Source: Department for Business and Trade and Small Business Commissioner research, July 2025
Businesses that close each year because of late payments, equivalent to 38 businesses every day (July 2025 research by London Economics for the Department for Business and Trade and the Small Business Commissioner). The Commissioner's 30 December 2025 news release gives 4,000 a year with the same 38 a day; 38 a day matches 14,000. Sources: Small Business Commissioner, Late Payments Research 2025 (read 1 November 2026); Small Business Commissioner, 30 December 2025 (read 1 November 2026)
Enquiries handled by the Small Business Commissioner's casework team in 2024 to 2025, with 29 complaints received. Source: Office of the Small Business Commissioner Annual Report and Accounts 2024 to 2025 (read 1 November 2026)
Paid to small businesses with the Small Business Commissioner's help since it was set up in 2017, as the office reported in December 2025. Source: Small Business Commissioner, 30 December 2025 (read 1 November 2026)
Businesses holding a Fair Payment Code award (373 gold, 151 silver, 316 bronze; the Commissioner's own tier counts add up to 840). The Fair Payment Code has replaced the Prompt Payment Code. Source: Small Business Commissioner, Fair Payment Code (read 1 November 2026)
Fair Payment Code gold award: the business pays at least 95% of all invoices within 30 days. Silver and bronze use 60 days, and silver also needs 95% of small business invoices paid within 30 days. Source: Small Business Commissioner, about the Fair Payment Code (read 1 November 2026)
If two businesses agree a payment date, it must usually be within 60 days. They can agree a longer period, but it must be fair to both. Source: GOV.UK, late commercial payments (read 1 November 2026)
Statutory interest rate SMEs are entitled to charge on overdue B2B invoices under the Late Payment of Commercial Debts Act (3.75% on 30 June 2026 plus 8 percentage points = 11.75%). Sources: GOV.UK (8% plus base rate); Bank of England (base rate)
Fixed sum you can charge for recovering a late payment, once per payment: £40 on a debt up to £999.99, £70 from £1,000 to £9,999.99, and £100 on £10,000 or more. Source: GOV.UK, late commercial payments (read 1 November 2026)
Large businesses the Department for Business and Trade estimates were required to report on their payment practices in 2024, before the 2025 size threshold changes. They submitted 11,178 valid reports in 2025. Source: Department for Business and Trade, large businesses' payment practices and performance statistics 2025 (read 1 November 2026)
Share of invoices large businesses paid late in 2025 (the median across their payment practice reports, down from 25% in 2018). They took 32 days on average to pay. Source: Department for Business and Trade, large businesses' payment practices and performance statistics 2025 (read 1 November 2026)
| Metric | Value | Source |
|---|---|---|
| Estimated annual cost of late payment to the UK economy (businesses are owed about £26bn in late payments at any given time). | £11bn | Department for Business and Trade and Small Business Commissioner research, July 2025 |
| Businesses that close each year because of late payments, equivalent to 38 businesses every day (July 2025 research by London Economics for the Department for Business and Trade and the Small Business Commissioner). The Commissioner's 30 December 2025 news release gives 4,000 a year with the same 38 a day; 38 a day matches 14,000. | 14,000 | Small Business Commissioner, Late Payments Research 2025, and news release 30 December 2025 (read 1 November 2026) |
| Enquiries handled by the Small Business Commissioner's casework team in 2024 to 2025, with 29 complaints received. | 591 | Office of the Small Business Commissioner Annual Report and Accounts 2024 to 2025 (read 1 November 2026) |
| Paid to small businesses with the Small Business Commissioner's help since it was set up in 2017, as the office reported in December 2025. | £10m | Small Business Commissioner, 30 December 2025 (read 1 November 2026) |
| Businesses holding a Fair Payment Code award (373 gold, 151 silver, 316 bronze; the Commissioner's own tier counts add up to 840). The Fair Payment Code has replaced the Prompt Payment Code. | 841 | Small Business Commissioner, Fair Payment Code (read 1 November 2026) |
| Fair Payment Code gold award: the business pays at least 95% of all invoices within 30 days. Silver and bronze use 60 days, and silver also needs 95% of small business invoices paid within 30 days. | 30 days | Small Business Commissioner, about the Fair Payment Code (read 1 November 2026) |
| If two businesses agree a payment date, it must usually be within 60 days. They can agree a longer period, but it must be fair to both. | 60 days | GOV.UK, late commercial payments (read 1 November 2026) |
| Statutory interest rate SMEs are entitled to charge on overdue B2B invoices under the Late Payment of Commercial Debts Act (3.75% on 30 June 2026 plus 8 percentage points = 11.75%). | 8% + BoE base rate | UK Government / Bank of England |
| Fixed sum you can charge for recovering a late payment, once per payment: £40 on a debt up to £999.99, £70 from £1,000 to £9,999.99, and £100 on £10,000 or more. | £40 to £100 | GOV.UK, late commercial payments (read 1 November 2026) |
| Large businesses the Department for Business and Trade estimates were required to report on their payment practices in 2024, before the 2025 size threshold changes. They submitted 11,178 valid reports in 2025. | 14,000 to 16,000 | Department for Business and Trade, large businesses' payment practices and performance statistics 2025 (read 1 November 2026) |
| Share of invoices large businesses paid late in 2025 (the median across their payment practice reports, down from 25% in 2018). They took 32 days on average to pay. | 15% | Department for Business and Trade, large businesses' payment practices and performance statistics 2025 (read 1 November 2026) |
Source: Department for Business and Trade and Small Business Commissioner research, July 2025, Small Business Commissioner, Office of the Small Business Commissioner Annual Report and Accounts 2024 to 2025, Small Business Commissioner, Fair Payment Code, GOV.UK, UK Government / Bank of England, Department for Business and Trade
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### UK Late Payment Policy Statistics 2026: key figures | Metric | Value | Source | | --- | --- | --- | | Estimated annual cost of late payment to the UK economy (businesses are owed about £26bn in late payments at any given time). | £11bn | Department for Business and Trade and Small Business Commissioner research, July 2025 | | Businesses that close each year because of late payments, equivalent to 38 businesses every day (July 2025 research by London Economics for the Department for Business and Trade and the Small Business Commissioner). The Commissioner's 30 December 2025 news release gives 4,000 a year with the same 38 a day; 38 a day matches 14,000. | 14,000 | Small Business Commissioner, Late Payments Research 2025, and news release 30 December 2025 (read 1 November 2026) | | Enquiries handled by the Small Business Commissioner's casework team in 2024 to 2025, with 29 complaints received. | 591 | Office of the Small Business Commissioner Annual Report and Accounts 2024 to 2025 (read 1 November 2026) | | Paid to small businesses with the Small Business Commissioner's help since it was set up in 2017, as the office reported in December 2025. | £10m | Small Business Commissioner, 30 December 2025 (read 1 November 2026) | | Businesses holding a Fair Payment Code award (373 gold, 151 silver, 316 bronze; the Commissioner's own tier counts add up to 840). The Fair Payment Code has replaced the Prompt Payment Code. | 841 | Small Business Commissioner, Fair Payment Code (read 1 November 2026) | | Fair Payment Code gold award: the business pays at least 95% of all invoices within 30 days. Silver and bronze use 60 days, and silver also needs 95% of small business invoices paid within 30 days. | 30 days | Small Business Commissioner, about the Fair Payment Code (read 1 November 2026) | | If two businesses agree a payment date, it must usually be within 60 days. They can agree a longer period, but it must be fair to both. | 60 days | GOV.UK, late commercial payments (read 1 November 2026) | | Statutory interest rate SMEs are entitled to charge on overdue B2B invoices under the Late Payment of Commercial Debts Act (3.75% on 30 June 2026 plus 8 percentage points = 11.75%). | 8% + BoE base rate | UK Government / Bank of England | | Fixed sum you can charge for recovering a late payment, once per payment: £40 on a debt up to £999.99, £70 from £1,000 to £9,999.99, and £100 on £10,000 or more. | £40 to £100 | GOV.UK, late commercial payments (read 1 November 2026) | | Large businesses the Department for Business and Trade estimates were required to report on their payment practices in 2024, before the 2025 size threshold changes. They submitted 11,178 valid reports in 2025. | 14,000 to 16,000 | Department for Business and Trade, large businesses' payment practices and performance statistics 2025 (read 1 November 2026) | | Share of invoices large businesses paid late in 2025 (the median across their payment practice reports, down from 25% in 2018). They took 32 days on average to pay. | 15% | Department for Business and Trade, large businesses' payment practices and performance statistics 2025 (read 1 November 2026) | Source: Department for Business and Trade and Small Business Commissioner research, July 2025, Small Business Commissioner, Office of the Small Business Commissioner Annual Report and Accounts 2024 to 2025, Small Business Commissioner, Fair Payment Code, GOV.UK, UK Government / Bank of England, Department for Business and Trade
What the numbers mean
The law lets you charge interest and a fixed recovery sum on a late business invoice. The Small Business Commissioner says it "has a statutory duty to review enquiries and investigate formal complaints made by small businesses regarding late and overdue payments". Where it investigates, its FAQs say it can "make recommendations to resolve the matter". The Fair Payment Code is an award that businesses apply for. It has replaced the Prompt Payment Code.
The payment practices reporting duty, set by the Reporting on Payment Practices and Performance Regulations 2017, requires large companies and LLPs to publish their own payment data twice yearly on GOV.UK. It offers transparency but relies on businesses reporting accurately.
The Department for Business and Trade, which publishes statistics from these reports, found large businesses paid 15% of invoices late in 2025 and took 32 days on average. Invoice finance is one way a small business can get money from unpaid invoices before the customer pays.
Statutory interest is 11.75% a year today (8 percentage points plus the Bank of England base rate of 3.75% on 30 June 2026).
FAQs
What is the Small Business Commissioner and what powers does it have?
The Small Business Commissioner is an independent public body set up by the government under the Enterprise Act 2016 to tackle late payment and unfair payment practices in the private sector, across the whole UK. It reviews enquiries, investigates formal complaints from small businesses about late and overdue payments, and gives advice. Where it investigates a dispute, it can make recommendations to resolve it.
What happened to the Prompt Payment Code?
The Fair Payment Code has replaced it. The Small Business Commissioner runs it for the government. Businesses apply for one of three awards. Gold means paying at least 95% of all invoices within 30 days. Silver means 95% of all invoices within 60 days, including 95% of small business invoices within 30 days. Bronze means 95% of all invoices within 60 days. It is free to apply.
Can I charge interest on a late invoice under UK law?
Yes. Under the Late Payment of Commercial Debts (Interest) Act 1998, you are entitled to charge statutory interest at 8% above the Bank of England base rate on overdue B2B invoices. For interest that starts to run between 1 July and 31 December 2026, the rate uses the base rate on 30 June 2026 (3.75%), so it is 11.75% a year. You can also charge a fixed sum of £40, £70 or £100 for recovering each late payment, depending on the size of the debt, plus reasonable recovery costs.
What is the payment practices reporting duty?
Large UK companies and limited liability partnerships meeting two of three size thresholds (over 250 employees, over £54 million turnover, or over £27 million balance sheet total, thresholds in force since 6 April 2025) must publish a report every six months, under the Reporting on Payment Practices and Performance Regulations 2017, on how quickly they pay invoices, the proportion paid late, and their standard payment terms. The reports are filed on GOV.UK and are publicly searchable there and allow suppliers to check a customer's payment track record before agreeing terms.
How does invoice finance help businesses affected by late payment?
Invoice finance lets a business get money from unpaid customer invoices before they are due. With invoice discounting or factoring, a lender pays you part of each invoice soon after you raise it, then takes its money back when the customer pays. Each lender sets its own advance and fees, so a late-paying customer matters less to your day-to-day cash. There is a cost, so compare it with what waiting for payment costs you.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam was managing director of Penny, a UK invoice finance business, from July 2020 to November 2023. His career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library. Career record.
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