Late payments have long been a silent killer of UK small businesses, costing the economy billions every year. In a landmark move for 2026, the government has introduced the toughest anti-late payment laws in over a generation.
At CoreAcc Accountants, we believe this is a turning point for SME cash flow. These new rules aren't just guidance—they have real teeth and are designed to protect you from being used as an interest-free bank by larger firms.
The New 60-Day Absolute Cap
From April 2026, it is officially illegal for a large firm to set payment terms longer than 60 days when paying smaller suppliers. Any contract that attempts to enforce a longer window is now legally void. Furthermore, the Small Business Commissioner has been granted sweeping new powers to investigate and fine large companies tens of millions of pounds for persistent late payments.
Mandatory Interest and Compensation
The law now requires all commercial contracts to include statutory interest, currently set at 8% above the Bank of England base rate. For example, if a small business is owed £10,000 and is paid 60 days late, they are now legally entitled to the interest plus a fixed compensation fee. Large firms can no longer contract out of these rules; if they pay you late, they owe you the extra money.
How CoreAcc Accountants Can Help
Cash flow is the lifeblood of your business, and we are here to help you protect it. We provide:
● Contract Review: We can review your terms and conditions to ensure they are fully compliant with the latest 2026 legislation.
● Debt Recovery Support: We can help you calculate the exact interest and compensation you are owed on overdue invoices.
● Cash Flow Forecasting: Our team uses real-time data to show you exactly how late payments are impacting your growth, providing the evidence you need to challenge poor payers.
Reach out to CoreAcc Accountants to learn how we can help you enforce your payment rights and secure your business cash flow.
