Small Business Protections (Late Payments) Bill

The Bill is in the pre-legislative-scrutiny phase: announced in the King's Speech 2026 1 and underpinned by the published consultation response 2. The Government has not yet introduced the Bill, with introduction signalled 'as soon as Parliamentary time allows'. Operational scaffolding is already moving. The Small Business Commissioner — the body that will receive new investigation, adjudication and fining powers — has a new incumbent, Emma Jones CBE, appointed in June 2025 explicitly to lead the late-payments crackdown 3, and the SBC's 2024–25 annual report records that the office recovered over £1.55m for small businesses, more than the previous four years combined 4. The 2025 launch of the Small Business Plan placed the legislative commitment 'front and centre' 5. The reporting architecture the Bill leans on — the duty under SBEE Act 2015 s.3 and the Reporting on Payment Practices and Performance Regulations 2017 — has been refreshed via September 2025 reporting guidance 6 and December 2025 directors'-report guidance 7. On the construction side, the Business and Trade Committee has been engaging on insolvency exposure for small construction firms 8, and the package is being trailed to businesses by Minister Blair McDougall through a 24 March 2026 letter. Because late payments is devolved in Scotland and Wales and transferred in NI, the UK-wide ambition will be delivered through the Late Payment Common Framework, on which the Minister wrote to the Business and Trade Committee on 19 March 2026 9.

The decisive recent moment is the 24 March 2026 publication of the Government response, 'Time to pay up' 1, with its accompanying respondents annex 2. The response confirmed the six-measure package and provided design detail: four exemptions to the 60-day cap (large-to-large, smaller-purchaser, imports, exports); a deferred but possible future reduction to 45 days; statutory-interest mandatoriness with removal of opt-out; SBC funding via both DBT grant and cost recovery on investigations and adjudications. The same week the Minister wrote to businesses and to the Business and Trade Committee on the Late Payment Common Framework 3. The package was then carried into the King's Speech 2026 (May 2026) with its background briefing notes 4, which add the FSB endorsement from Tina McKenzie MBE. Committee scrutiny meanwhile produced the February 2026 Business and Trade Committee findings on low SME confidence 5 and on Companies House integration of Fair Payment Code data 6. A Commons Library debate pack 7 supported the 4 March 2026 Estimates Day debate on DBT priorities, in which late-payments enforcement resourcing was in scope.

Five forward items are material. First, Bill introduction: timing depends on parliamentary slot but the King's Speech commitment 1 implies the 2026–27 session. The Bill text and Explanatory Notes will reveal the choice of statutory mechanism for the 60-day cap (contract-validity rule vs implied-term insertion), the precise definition of 'persistent late payer', and the SBC's award-enforcement route. Second, commencement of the 60-day cap, signalled as no earlier than 2027 with a transition period 2 — the start-date SI will materially affect working-capital planning by large purchasers. Third, the promised implementation consultation on the construction retentions ban 2; tier-1 contractors, surety providers and the JCT/NEC suites all have exposure here, and alignment with the Housing Grants, Construction and Regeneration Act 1996 Part 2 is a design constraint flagged in the response. Fourth, the SBC fining regime — the persistent-late-payer threshold and unpaid-interest-based fine ceiling will both move via secondary legislation. Watch whether SBC fines are statutory penalties or recoverable as civil debts, and whether SBC adjudication awards are enforceable as county-court orders. Fifth, the Common Framework refresh with the devolved administrations 3; without alignment, the practical UK-wide reach the Government has promised could be uneven for Scotland and NI. Beyond these, the 2027–28 window may see a fresh consultation on reducing maximum terms to 45 days 2, and the SBC's 2025–26 recovery figures will be the early performance baseline against which the new enforcement powers are judged.

Three substantive uncertainties. First, the persistent-late-payer threshold and the SBC fining-quantum design are not yet defined; both are critical to compliance posture and both are deferred to secondary legislation 1. Second, the consultation response acknowledges 'bunching' risk — large purchasers may move to a 60-day default rather than continuing best-practice shorter terms 1; the Bill relies on the Fair Payment Code and Reporting Regulations to counter this, which is a behavioural rather than legal lever. Third, devolution alignment is procedural rather than concluded; the Late Payment Common Framework letter 2 signals process, not outcome. Inferred from corpus gap: no Bill text or Explanatory Notes have appeared in this corpus, so the precise legal mechanism by which the 60-day cap voids longer terms (and the construction-retentions ban operates on existing JCT/NEC contracts) is not yet readable. Inferred from corpus gap: no NAO or formal impact assessment is present in the corpus, leaving the £11bn / 38-businesses-a-day headline figures uncorroborated by independent audit.