The IPA has today (26 March 2026) highlighted the key measures contained with the government’s response to its public consultation of last year on the scourge of late payments by large UK businesses.
Having responded on behalf of its members, the IPA welcome’s the government’s determination to tackle a problem which it says costs the UK economy £11 billion each year.
Key measures highlighted within the Government’s “Time to Pay Up” response, that the IPA has flagged to its members, will include:
- maximum payment terms of 60 days, with only limited exceptions. The exceptions will include where: both parties are large companies; the purchaser is the smaller party; or the goods/services are either being imported or exported. (The proposal to shorten the term in future to 45 days has been shelved);
- a statutory time limit for raising disputes over goods/services so that businesses that do not raise a dispute within the time limit will need to pay compensation to the supplier;
- a statutory requirement that all commercial contracts will contain a right to statutory interest at 8% above the Bank of England base rate, so that businesses will no longer be able to negotiate alternative remedies or different interest rates for late payments; and
- enhancing the powers of the Small Business Commissioner, including enabling it to impose financial penalties for companies that persistently pay late.
Says Richard Lindsay, Director of Legal & Public Affairs, IPA: “These measures will be welcome news for a number of agencies which suffer from late paying clients and/or clients which insist on unreasonably long payment terms. It is a shame that the potential shift from 60-day terms to 45 days looks to be off the table for now when 30 days has always been the standard in our industry. Agencies will of course have to take heed of these changes too, if they are the customer of their own smaller suppliers.”
The measures will require a combination of primary and secondary legislation, and the response says that the government will legislate “as soon as parliamentary time allows”. The IPA has said it will continue to monitor the situation, liaising with Government to ensure the measures are implemented.
Last updated 30 March 2026