UK Late Payment Statistics 2026
Late payment remains one of the most damaging pressures on UK SMEs. Businesses affected by late payment are owed £17,000 each on average, and about £26bn is owed across the UK at any given time. UK companies collectively wait beyond agreed terms on invoices worth tens of billions of pounds each year, contributing directly to insolvency, stalled growth and rising demand for invoice finance.
Key statistics
Average late payments owed to each UK business affected by late payment. Source: Department for Business and Trade / Small Business Commissioner (July 2025)
Estimated number of UK businesses that close each year because of late payments. Source: Department for Business and Trade / Small Business Commissioner (July 2025)
Standard statutory payment term for UK business-to-business transactions under the Late Payment of Commercial Debts (Interest) Act 1998. Source: UK Government / Legislation.gov.uk
Average UK B2B payment delay beyond agreed terms, 2025. Source: Debitura UK Collection Report
Estimated late payments owed to UK businesses at any given time. Source: Department for Business and Trade / Small Business Commissioner (July 2025)
Statutory late payment interest rate (BoE base rate 3.75% plus 8 percentage points) applicable to B2B debts. Source: UK Government / Pay on Time
Fixed debt recovery cost a creditor can claim on a late B2B invoice under the 1998 Act, depending on invoice value. Source: UK Government
Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance, checked September 2026). Source: UK Finance
Estimated annual cost of late payment to the UK economy (July 2025 research commissioned by the Department for Business and Trade). Source: Small Business Commissioner
Share of UK businesses (over 1.5 million) affected by late payment each year. Source: Small Business Commissioner
Average time per affected business spent chasing late payments each year, 133 million hours across the economy (22% of surveyed businesses said they spent staff time chasing). Source: Small Business Commissioner
Payment term that must be included in all public procurement contracts, and in subcontracts that substantially contribute to them, from 24 February 2025 under the Procurement Act. Source: GOV.UK
| Metric | Value | Source |
|---|---|---|
| Average late payments owed to each UK business affected by late payment. | £17,000 | Department for Business and Trade / Small Business Commissioner (July 2025) |
| Estimated number of UK businesses that close each year because of late payments. | 14,000 | Department for Business and Trade / Small Business Commissioner (July 2025) |
| Standard statutory payment term for UK business-to-business transactions under the Late Payment of Commercial Debts (Interest) Act 1998. | 30 days | UK Government / Legislation.gov.uk |
| Average UK B2B payment delay beyond agreed terms, 2025. | 21 days | Debitura UK Collection Report |
| Estimated late payments owed to UK businesses at any given time. | £26bn | Department for Business and Trade / Small Business Commissioner (July 2025) |
| Statutory late payment interest rate (BoE base rate 3.75% plus 8 percentage points) applicable to B2B debts. | 11.75% | UK Government / Pay on Time |
| Fixed debt recovery cost a creditor can claim on a late B2B invoice under the 1998 Act, depending on invoice value. | £40 to £100 | UK Government |
| Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance, checked September 2026). | £20bn+ | UK Finance |
| Estimated annual cost of late payment to the UK economy (July 2025 research commissioned by the Department for Business and Trade). | £11bn | Small Business Commissioner |
| Share of UK businesses (over 1.5 million) affected by late payment each year. | 28% | Small Business Commissioner |
| Average time per affected business spent chasing late payments each year, 133 million hours across the economy (22% of surveyed businesses said they spent staff time chasing). | 86 hours | Small Business Commissioner |
| Payment term that must be included in all public procurement contracts, and in subcontracts that substantially contribute to them, from 24 February 2025 under the Procurement Act. | 30 days | GOV.UK |
Source: Department for Business and Trade / Small Business Commissioner (July 2025), UK Government / Legislation.gov.uk, Debitura UK Collection Report, UK Government / Pay on Time, UK Government, UK Finance, Small Business Commissioner, GOV.UK
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### UK Late Payment Statistics 2026: key figures | Metric | Value | Source | | --- | --- | --- | | Average late payments owed to each UK business affected by late payment. | £17,000 | Department for Business and Trade / Small Business Commissioner (July 2025) | | Estimated number of UK businesses that close each year because of late payments. | 14,000 | Department for Business and Trade / Small Business Commissioner (July 2025) | | Standard statutory payment term for UK business-to-business transactions under the Late Payment of Commercial Debts (Interest) Act 1998. | 30 days | UK Government / Legislation.gov.uk | | Average UK B2B payment delay beyond agreed terms, 2025. | 21 days | Debitura UK Collection Report | | Estimated late payments owed to UK businesses at any given time. | £26bn | Department for Business and Trade / Small Business Commissioner (July 2025) | | Statutory late payment interest rate (BoE base rate 3.75% plus 8 percentage points) applicable to B2B debts. | 11.75% | UK Government / Pay on Time | | Fixed debt recovery cost a creditor can claim on a late B2B invoice under the 1998 Act, depending on invoice value. | £40 to £100 | UK Government | | Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance, checked September 2026). | £20bn+ | UK Finance | | Estimated annual cost of late payment to the UK economy (July 2025 research commissioned by the Department for Business and Trade). | £11bn | Small Business Commissioner | | Share of UK businesses (over 1.5 million) affected by late payment each year. | 28% | Small Business Commissioner | | Average time per affected business spent chasing late payments each year, 133 million hours across the economy (22% of surveyed businesses said they spent staff time chasing). | 86 hours | Small Business Commissioner | | Payment term that must be included in all public procurement contracts, and in subcontracts that substantially contribute to them, from 24 February 2025 under the Procurement Act. | 30 days | GOV.UK | Source: Department for Business and Trade / Small Business Commissioner (July 2025), UK Government / Legislation.gov.uk, Debitura UK Collection Report, UK Government / Pay on Time, UK Government, UK Finance, Small Business Commissioner, GOV.UK
“The most-quoted late payment figures are estimates rather than measured counts, and attributing a business closure to late payment alone is rarely clean: it is usually one pressure among several. The Small Business Commissioner figures come from July 2025 research commissioned by the Department for Business and Trade and cover all UK sectors. We removed sector-level payment-day and cost figures that we could not trace to a published source.”
What the numbers mean
Late payment is a structural problem, not a cyclical one. Research commissioned by the Department for Business and Trade and published by the Small Business Commissioner in July 2025 estimates that late payment costs the UK economy almost £11 billion a year, that 14,000 businesses close each year because of it, and that over 1.5 million businesses (28%) are affected each year.
The statutory framework exists to protect creditors. The Late Payment of Commercial Debts (Interest) Act 1998 gives businesses the right to charge interest at 8 percentage points above the Bank of England base rate, currently 3.75%, plus fixed debt recovery costs of between £40 and £100.
In practice, many small businesses do not exercise these rights for fear of damaging commercial relationships. Public contracts must also include a 30-day payment term, passed down to subcontracts, since 24 February 2025.
The Payment Practices Reporting regime, introduced in 2017, requires large companies to publish their payment performance twice yearly. The Small Business Commissioner receives and investigates complaints about payment practices.
For many SMEs, invoice finance is one practical response to late payment risk. Rather than waiting for a customer to pay, a business can draw an advance against the invoice: several UK Finance members state up to 90% of the invoice value. UK Finance says its members provide well over £20 billion to tens of thousands of UK businesses at any one time.
FAQs
What is the legal interest rate I can charge on a late B2B invoice in the UK?
Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge interest at 8 percentage points above the Bank of England base rate. With the base rate at 3.75% as of December 2025, the applicable rate is 11.75% per annum. You can also claim fixed debt recovery costs of £40 on invoices under £1,000, £70 on invoices between £1,000 and £9,999, and £100 on invoices of £10,000 or more.
What is Payment Practices Reporting and does it apply to my business?
Payment Practices Reporting (PPR) requires large UK companies, as defined in the reporting regulations, to publish data on how quickly they pay suppliers. Reports must be filed every six months via the government portal. The data is publicly searchable, allowing suppliers to assess a potential customer's payment behaviour before agreeing terms.
Which UK sectors have the worst late payment records?
Late payment affects every sector, and published research rarely compares sectors like for like, so we do not rank them. Construction records more company insolvencies than any other sector (4,040 in England and Wales in 2024, Insolvency Service), but that figure records outcomes, not causes.
Can invoice finance help protect my business against late payment?
Yes. Invoice finance, whether through factoring or invoice discounting, allows you to unlock the cash tied up in unpaid invoices without waiting for your customer to pay. Each provider sets its own advance rate; several UK Finance members state up to 90% of the invoice value. This means your working capital is not dependent on your customer meeting their payment terms. Some facilities also include bad debt protection, which covers you if the customer fails to pay at all.
What is the Small Business Commissioner and how can they help with late payment?
The Small Business Commissioner is an independent UK government body set up under the Enterprise Act 2016 to support small businesses dealing with payment disputes with larger businesses. If you are a small business owed money by a larger business, you can submit a complaint to the Commissioner's office free of charge.
The Commissioner can investigate and make recommendations, though formal enforcement powers are currently limited. Contact details and the complaint form are available at smallbusinesscommissioner.gov.uk.
These figures are compiled in the UK Late-Payment Index, our data study with a downloadable dataset.
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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