New Commercial Payments Bill Won’t Stop Late Payers Going Silent, Warns Debt Recovery Specialists

LONDON, United Kingdom, November 2, 2026 (EZ Newswire) — As the UK’s Commercial Payments Bill continues its passage through Parliament, promising the most significant overhaul of business payment practices in a generation, leading business debt recovery specialist Federal Management is warning that stronger legislation alone will not guarantee businesses get paid.

The Bill proposes a statutory cap of 60 days on payment terms, reduced to 30 days for public bodies, alongside mandatory interest on late payments set at 8% above the Bank of England base rate, a provision that cannot be contracted out of by either party. New invoice dispute rules would also require businesses to raise disputes at least eight days before payment falls due, with automatic financial penalties for non-compliance.

The Small Business Commissioner would gain substantially expanded powers, including the ability to investigate disputes, require businesses to publish payment data, and issue enforcement directions carrying penalties of up to 1% of annual UK turnover.

The government estimates that late payment costs the UK economy £11 billion a year and contributes to the closure of around 14,000 businesses annually. The reforms are expected to come into force in 2027.

FCA-regulated Federal Management, which has recovered hundreds of millions of pounds for UK businesses since 2004, welcomes the direction of reform but says the practical gap — what happens after an invoice goes unpaid and a debtor stops responding — remains the real problem for many businesses.

“Stronger legislation is long overdue, and these reforms will make a real difference for businesses dealing with slow but cooperative customers,” said Marc Curtis-Smith, Managing Director of Federal Management. “However, statutory rights and mandatory interest offer little comfort when a debtor has stopped communicating altogether. In our experience, the businesses that recover what they are owed are those that escalate promptly, before recovery prospects diminish.”

Federal Management is urging businesses to strengthen their credit control processes now, well ahead of the Bill’s anticipated implementation. Its practical advice: put payment terms in writing from the outset, keep a clear record of every reminder and response, act early on overdue invoices rather than leaving them to age, and escalate to formal debt recovery the moment informal chasing has failed.

“What these reforms cannot address is the debt that simply goes cold,” said Curtis-Smith. “The longer an invoice remains outstanding, the harder recovery becomes. Legislation can raise the consequences for persistent late payers, but it cannot compel a debtor who has disengaged entirely to settle what they owe. That is where specialist recovery support becomes essential.”

About Federal Management

Federal Management is a long-established commercial debt recovery specialist, trading since 2004. The company is FCA-Regulated (FRN: 692583) and accredited to ISO:9001 and ISO:27001. It is part of a group that also includes Frontline Collections, an FCA-regulated debt collection agency specialising in private and consumer debt recovery. For more information, visit federalmanagement.co.uk.

Disclaimer

The information provided in this release is for general informational purposes only and does not constitute formal legal or financial advice. Readers should consult qualified legal advisors regarding specific commercial contracts and forthcoming statutory requirements.

SOURCE: Federal Management