R3, the UK’s trade association for restructuring, turnaround and insolvency professionals, has welcomed the Government’s introduction of new legislation to clamp down on late payments to suppliers, announced in today’s King’s Speech.
Late payment remains a persistent challenge for UK businesses, particularly small and medium-sized firms. R3’s latest Business Health Report found that late payments have increased in recent months, placing significant strain on cash flow and in some cases, threatening business survival.
The Small Business Protections (Late Payments Bill) will impose maximum payment terms of 60 days, enforce interest for late payments and give the Small Business Commissioner new powers, including the ability to fine businesses that persistently pay their suppliers late.
Sonia Jordan, President of R3 and Partner at Knights, said:
“Late payment continues to be a significant and long-standing challenge facing UK businesses, particularly SMEs. When payments are delayed, it disrupts cash flow, limits a company’s ability to invest and grow and in more serious cases can push otherwise viable businesses into financial distress.
“Our latest Business Health Report highlights that over 1.5 million businesses were affected by late payments in the first quarter of 2026, adding to the financial pressures many firms are already facing in a challenging economic environment.
“We therefore welcome the Government’s intention to bring forward legislation to tackle poor payment practices. Measures which encourage prompt, fair payment and strengthen accountability have the potential to make a meaningful difference to business confidence and resilience.
“Improving payment culture across the supply chain is key to reducing financial distress and helping businesses remain sustainable in the long term. Businesses should prioritise credit control and seek professional advice early if they are struggling, before late payments and arrears become unmanageable.”
