Don't wait for the Commercial Payments Bill: the late-payment rights you already have

By Jason Sibley

If you've got unpaid invoices and you're hoping new legislation will help, stop waiting. A Commercial Payments Bill is making its way through Parliament and may improve things for small suppliers. But your overdue invoice is due now, and you already have rights you can use.

The Bill isn't law yet

The Commercial Payments Bill [HL] was introduced in the Lords on 19 May 2026. The bill page on Parallel Parliament shows second reading on 9 June, committee on 21 July and report stage on 15 September. The next event listed is the Lords third reading, scheduled for Tuesday 20 October 2026, though future business can change.

The Bill then has to go through the Commons. Law firm Farrer & Co says there's no confirmed implementation date. As proposed, it would:

• set a 60-day maximum payment term for large private buyers paying smaller suppliers
• expand the Small Business Commissioner's powers in payment disputes
• ban retention clauses in construction contracts

These are proposals only. The Lords Library notes that the debate included whether 60 days is ambitious enough, so the detail remains under discussion. I've covered the Bill in a separate piece. Keep an eye on it, but don't build your cashflow around it.

What you can do today

This is general information, not legal advice. For a specific dispute, talk to a solicitor and read the GOV.UK pages linked below, which are the primary sources.

Charge statutory interest

GOV.UK says statutory interest on business to business debts is 8% plus the Bank of England base rate. You can't claim it if your contract sets a different rate of interest, so read your terms first. GOV.UK's method is to work out the annual interest, divide by 365 for a daily figure, then multiply by the number of days late. If you add interest, send a new invoice for it.

Claim the fixed recovery sum

GOV.UK sets a fixed sum by the size of the debt:

• up to £999.99: £40
• £1,000 to £9,999.99: £70
• £10,000 or more: £100

You can claim it once for each payment. GOV.UK also says you can claim reasonable costs each time you try to recover the debt.

Complain to the Small Business Commissioner

The Small Business Commissioner runs a free complaint scheme for small businesses with fewer than 50 employees, against larger businesses (more than 50 employees). Its FAQs say to complain about non-payment within 12 months of the payment due date. A complaint may not progress if you haven't made reasonable efforts to resolve it directly first. If you're close to the 50 line, check the FAQs.

Get free debt advice

The same FAQs mention Business Debtline, which gives free debt advice to small businesses and the self-employed. This may help if late payers are putting pressure on your own bills.

Where AI earns its keep

AI doesn't change your rights. It can help with the admin involved in using them. Four jobs suit it well:

• a chase log: invoice number and amount, the due date, then each chase with its date and the reply (this is also your evidence of "reasonable efforts")
• an evidence timeline built from your emails and invoices
• a draft interest calculation that you check against GOV.UK's method
• polite but firm letters for each stage

Check every number it gives you, from dates to the base rate. Don't paste customer personal data into consumer AI tools. Use business names and invoice numbers, and strip out individuals' personal details first. If you want help with the bookkeeping too, there's a guide to AI for bookkeeping and invoices.

For the timeline:

I run a small UK business and I'm chasing an overdue invoice. Below are the invoice details and my emails with the customer. Turn them into a dated timeline: invoice sent, due date, each reminder, each reply. Use only what I've pasted. Do not invent dates, amounts or conversations. Where something is missing, write [OWNER TO CHECK]. Use British English.

[Paste invoice details and emails here, personal details removed]

For the interest draft:

Draft a calculation of late-payment interest on a UK business to business invoice. The rate is 8% plus the Bank of England base rate. The method is: annual interest, divided by 365 for a daily amount, multiplied by days late. Show every step. Use only the figures I give you. Do not look up or assume the base rate or any date. If one is missing, write [OWNER TO FILL]. Remind me to check the result against GOV.UK before I use it.

Invoice amount: [£]
Due date: [date]
Counted up to: [date]
Base rate I have checked: [rate]

For the letters:

Draft three chasing emails for an unpaid invoice, in British English, polite but clear:
- stage 1: friendly reminder
- stage 2: firmer follow-up
- stage 3: final message before I take further steps
Use only the facts below. Do not invent dates, amounts, conversations or legal threats, and do not quote any law. Mark anything missing as [OWNER TO FILL].

Customer: [business name]
Invoice number, amount, due date: [details]
Earlier chasers: [dates and what was said]
What I want, and by when: [your request]

The relationship question

Using your rights doesn't have to cost you a good customer. Decide your approach before the next invoice goes overdue, while you can think calmly:

• Reliable customers who are late once: a friendly reminder, then a phone call. Keep interest and the fixed sum in reserve, and note in your log if you waive them.
• Customers who are often late: a firmer letter that includes the interest and fixed sum, and clearer payment terms on your next quote.
• Customers who ignore you: the full sequence, plus a Small Business Commissioner complaint if they're a larger business and you're inside the 12 months.

You decide which group each customer belongs in. Writing it down helps you treat people consistently instead of chasing whoever you feel least nervous about. There's more on tone in getting paid without the awkward chase, and a weekly cashflow sheet shows you which invoices to worry about first.

If you'd like company on this

If you'd like to set up a chase log and letter templates with someone alongside you, at My AI Apprentice we run AI sessions for small businesses. No pressure either way.