The Department for Business and Trade paid 1,449 supplier invoices late in the three years to May 2026, worth a combined £28.2m, according to Freedom of Information data analysed by the Parliament Street think tank. It is the same department that introduced the Bill the government said would back “millions of sole traders, freelancers, and family firms” against late payment.
Central government’s prompt payment policy, published on gov.uk, expects departments buying from small firms to settle 90 per cent of valid, undisputed invoices from small and medium-sized enterprises inside five days, and every undisputed invoice inside 30 days. Since 24 February 2025 the 30-day term has also applied through the supply chains of public contracts under the Procurement Act, according to the same guidance.
The FOI figures cover April 2023 to May 2026 and show the number of late invoices at DBT falling each year. The department paid 565 invoices late in the year to March 2024, worth £9,643,117.20. In the year to March 2025 the count fell to 499, but the value rose to £11,410,939.48, according to the analysis. The year to March 2026 produced 369 late invoices worth £6,900,424.57, and another 16 invoices, worth £220,388.39, were paid late across April and May 2026.
Across the whole period the late payments totalled £28,174,869.64, the analysis found.
What the Bill would change
DBT leads the government’s drive against late payment in the private sector. On 19 May it introduced the Small Business Protections Bill, formally the Commercial Payments Bill, which would limit payment terms to a maximum of 60 days when large firms buy from smaller suppliers, and make interest on overdue invoices mandatory at 8 per cent over the Bank of England base rate. The Small Business Commissioner would gain powers to investigate persistent late payers and impose fines.
In its announcement of the Bill, the department said late payments cost the UK economy £11bn a year and close 38 businesses every day. Blair McDougall, the minister for small business and economic transformation, said: “Introducing this Bill is about standing up for those people, to restore fairness, dignity and security for small business owners and the self-employed, so they can focus on doing what they do best: growing their businesses and the economy.”
Peter Kyle, the business secretary at the time, said: “Costing the UK economy £11 billion every single year, late payments choke growth, cost jobs, and force too many good businesses to close.”
The planned regime is not universally supported. A former small business commissioner has warned that the crackdown risks a “car crash” when it is implemented, and separate figures reported by Business Matters on 15 July showed late payments by large businesses at their lowest level on record as the legislation approached.
Reaction to the figures
Kenny MacAulay, chief executive of Acting Office, an accountancy software company, said: “The UK economy simply can’t function if people don’t get paid on time. Every payment triggers another one, and when money doesn’t arrive, the whole chain starts to break.”
He added: “Small businesses are hit hardest because they rely heavily on cash flow to cover wages, rent and basic running costs. People expect to receive money on time and will have outgoing payments waiting behind it. All it takes is one late payment for things to quickly turn into a string of missed deadlines and financial pressure.”
DBT is responsible for promoting trade, investment and business innovation.
