Published in March 2026, the government’s response marks one of the strongest interventions to date to address late payments, an issue that continues to place significant strain on small and medium sized enterprises (SMEs). For many businesses, slow payments restrict cashflow, limit growth and increase financial risk – and BBF has consistently raised this as a priority issue on behalf of its members.

Turning business concerns into policy change

In its consultation submission, BBF brought together feedback from local businesses to call for clear, enforceable action rather than further reporting requirements. Central to BBF’s response was the need for:

• A legally binding 60-day maximum payment term across supply chains
• A 30-day deadline for raising invoice disputes
• Meaningful enforcement and penalties, rather than additional administrative burdens for SMEs

BBF warned that voluntary arrangements and increased paperwork had failed to shift behaviour and risked placing extra pressure on small businesses already stretched for time and resources.

Government adopts BBF-backed reforms

The government’s proposals strongly align with these recommendations. Its response confirms that a hard 60-day cap on payment terms will be introduced in law, subject to limited exemptions, signalling a move away from voluntary guidance towards clear, enforceable rules.

A mandatory 30-day window for invoice disputes will also be brought in, with statutory compensation payable to suppliers if disputes are not raised within this window – directly reflecting BBF’s call for faster resolution and greater certainty for suppliers.

Crucially, enforcement has been strengthened. The Small Business Commissioner (SBC) will be given expanded powers to investigate late payment practices, adjudicate disputes and issue fines against persistent offenders – addressing long standing concerns, raised by BBF, that poor payment behaviour has gone largely unchallenged.

Further measures to protect businesses

In some areas, the government has gone even further. Proposed measures include:

• Mandatory statutory interest on late payments, set at 8% plus Bank Rate
• A proposed ban on retention clauses in construction contracts
• Additional payment protections for construction suppliers, a sector particularly vulnerable to late payment risks

Why this matters for Buckinghamshire businesses

These reforms represent a clear step towards faster, fairer payment practices – reducing financial pressure on SMEs, strengthening supply chains and helping businesses plan and grow with confidence.

They also demonstrate the value of a strong, collective business voice. By feeding real world experiences from Buckinghamshire businesses directly into national consultations, BBF continues to ensure that local priorities help shape policy decisions that affect businesses every day.

As legislation is developed, BBF will continue to engage with government on behalf of its members to ensure these commitments translate into practical, effective change for businesses across Buckinghamshire.

To view the government’s response in full, please visit the government's late payments consultation page.

Share your insights with us

If you’re facing opportunities or challenges in your business that you’d like us to represent in conversations with local and national partners, please contact the Research Team at 
[email protected]

Looking for research and analysis on Buckinghamshire's economy?

Visit our dedicated Reports and Analysis webpages for the latest insights on the Buckinghamshire economy and workforce, and the effect of policy decisions on our local business community.

Buckinghamshire Business First is the primary source of insights from the business coalface. This intelligence is used to ensure strategies and policies are based on robust evidence and to ensure government at all levels is aware of the economic issues facing Buckinghamshire’s communities.

Photo by Tima Miroshnichenko.