Late payment consultation: Time to pay up – government response

The U.K. Department for Business and Trade shares insight into late payment issues. 

This government is determined to tackle the scourge of late payments which costs the UK economy £11 billion each year and leads to the closure of 38 UK businesses every day.

On average, business owners affected by late payments waste 86 hours per year chasing invoices. That is a staggering total of 133 million staff hours across all UK businesses. This is money for which the work is already done, resources have already been spent and payment is overdue.

In addition to time wasted, late payment impacts on the cash flow of small businesses. As a result, small businesses struggle to pay their hard-working employees on time, to pay for rent and to pay their own suppliers. They struggle to invest in technology, innovation and training, stifling their own growth, productivity and ultimately endangering their survival.

This is not right. It is not morally right for small businesses and the self-employed to be forced to expend time and resource which they do not have to chase payment that they are legally owed. And it is not good business. The status quo is wasteful, unproductive, drives small businesses to the wall, and holds back the potential of small businesses as an engine of economic growth.

Make no mistake – we are going to fix this problem. It’s time for the UK’s small businesses to be paid on time. It’s time to pay up.

I am grateful for the incredible levels of engagement with our public consultation that ran from 31 July 2025 to 23 October 2025. We had over 850 formal responses, more than ever before from consultations on this topic, with responses from businesses of every size, sector, region and nation in the UK.

Thank you for your time, effort and expertise in making sure that we are getting this right, and for working with us to tackle the problem of late payments once and for all.

You will see in this response the scale of our ambition. We will take forward the most ambitious legislation to tackle late payments in over 25 years, since the last time a Labour Government came to power. We will build upon and strengthen the reforms of the previous government while going significantly further and faster – putting in place the strongest legal framework on late payments in the G7.

We are putting tackling late payments at the centre of our efforts to make the UK the best place in the world to start, run and grow a business.

We want businesses to come with us on this journey. Every business that we spoke to as part of our consultation agreed with the importance of paying small businesses quickly and on time. Many of you are already making great efforts to do so, and there is excellent practice out there across the UK for others to follow.

I am grateful every day for the passion and dedication of UK business owners and will work with you to make sure our small businesses are paid on time, every time.

Peter Kyle
Secretary of State for Business and Trade and President of the Board of Trade

Read the whole report online.