Commercial Payments Bill [HL]
A bill to make provision about payment terms in commercial contracts; to make provision about interest on late payment of commercial debts; to ban retention clauses in the construction sector; to expand the powers of the Small Business Commissioner in relation to payment disputes and poor payment practices; to amend the Enterprise Act 2016 in connection with other functions of the Small Business Commissioner; and for connected purposes.
- Introduced by
- Lord Leong · Labour · Life peer
- Originating house
- Lords
- Introduced
- 19 May 2026
- Last updated
- 28 September 2026
What this bill does
Currently at Report stage in the Lords.
Forces faster payments and gives small firms stronger help when businesses pay late.
The latest version of the Commercial Payments Bill would tighten payment deadlines in commercial contracts, strengthen late-payment interest rules, ban construction retentions after a transition period, and give the Small Business Commissioner stronger powers. It also expands the Commissioner’s role in adjudicating disputes and investigating poor payment practices by larger businesses. Overall, the bill is aimed at improving cash flow and reducing harmful late payment, especially for small firms and construction subcontractors.
- Require many commercial contracts to set payment due dates within 30 days for public authorities and 60 days for other purchasers
- Make contract terms that go beyond those limits void, and imply the statutory payment term where a contract does not comply
- Restrict how long acceptance or verification procedures can delay payment, unless a longer period is fair and reasonable
- Limit final dates for payment in construction contracts and related sub-contracts, including public procurement construction contracts
- Ban retention clauses in construction after a two-year transition period, make older retentions ineffective after three years, and create rules for transitional retained sums
- Keep and strengthen statutory interest on late payment, while voiding contract terms that try to exclude or vary that right
- Create a fixed sum penalty for late raising of disputes in non-construction contracts
- Expand the Small Business Commissioner’s role to include binding or enforceable adjudication of payment disputes between small and larger businesses
- Allow the Commissioner to investigate persistent poor payment practices by larger businesses and issue recommendations, publication directions, enforcement directions, and financial penalties
- Add new duties and reporting requirements linked to payment practices, plus new regulation-making powers and transitional arrangements
The stage line is the same Parliament bill record as the heading. The summary is AI-generated and not independently reviewed. Report an error.
Progress
- 1st reading · Lords
- 2nd reading · Lords
- Committee stage · Lords
- Report stage · Lords
- 3rd reading · Lords