Last Updated on July 16, 2026
Thirty eight UK businesses close every day because someone did not pay them.
That is the government’s own figure, not a lobby group’s. Fourteen thousand closures a year, and eleven billion pounds off the UK economy.
None of those businesses had a marketing problem. They had an invoice problem. It is worth knowing the difference before you spend another pound trying to find more customers.
The 30 second version
- Late payments cost the UK economy almost £11bn a year and close about 14,000 businesses, which is 38 a day.
- Over 1.5 million businesses, 28% of all of them, are affected every year.
- £26bn is owed in late payments at any given moment. That averages £17,000 per affected business.
- 44% of SME invoices are paid late.
- A new Bill would cap payment terms at 60 days and make interest mandatory. It is not law yet.
The numbers
All of these come from the Department for Business and Trade’s 2025 research into the economic cost of late payments, unless stated otherwise.
| What | Number |
|---|---|
| Annual cost to the UK economy | Almost £11bn |
| Businesses closing each year because of late payment | 14,000 (38 a day) |
| Businesses affected each year | Over 1.5m (28%) |
| Owed in late payments at any given time | £26bn |
| Average owed per affected business | £17,000 |
| SME invoices paid late | 44% |
| Staff time chasing payment, per affected business | 86 hours a year |
| Staff time chasing payment, across the economy | 133m hours a year |
One number needs care. The 86 hours is not an average across all businesses. In the DBT survey, 22% of businesses said they spent staff time chasing late payments, and those that did spent an average of 86 hours a year on it. If you are in that 22%, 86 hours is your number.
You will also see a figure of 50,000 closures quoted in a lot of coverage. That is an older estimate from elsewhere. We are using 14,000 because it is the government’s own research and the methodology is published. If we are going to quote a number at you, you should be able to go and check it.
86 hours is the number that should bother you
Eighty six hours is more than two working weeks. Every year. Spent sending emails to people who already owe you money for work you have already done.
Ask yourself an uncomfortable question. How many hours did you spend on your marketing last year? For a lot of small businesses the honest answer is fewer than 86.
That is the whole problem in one comparison. The work is coming in. The work is getting done. The money is not arriving, and chasing it is eating the time you would have spent getting found by the next customer. Then the phone goes quiet, and the instinct is to buy some ads.
Construction has it worst
The House of Lords Library briefing on the Bill notes the problem is particularly pronounced in construction, and points at two practices in particular: retentions, where a slice of your money is held back after the job is finished, and uncapped liabilities.
If you are a trade, this is not a statistic. It is the five per cent of a job you finished eight months ago that you have quietly written off.
What is changing, and what is not
The Commercial Payments Bill, which the government calls the Small Business Protections Bill, was introduced in the House of Lords on 19 May 2026 and had its second reading on 9 June 2026. It is still going through Parliament.
Read that again, because most of the coverage does not make it clear. It is not law. Nothing has changed for you today.
What it would do, if passed:
- Cap payment terms at 60 days for large firms paying smaller suppliers.
- Make interest on late payments mandatory, set at 8% above the Bank of England base rate.
- Ban the withholding of retention sums under construction contracts.
- Give the Small Business Commissioner power to investigate, adjudicate disputes, take enforcement action and issue fines.
Two things worth knowing. It would apply only to UK to UK business transactions, so it does nothing about an overseas customer. And late payment is devolved in Scotland and Wales and transferred in Northern Ireland, so the detail there depends on the devolved authorities.
What to do about it now
Start: find out what your actual number is. Not how it feels. Open your accounts and work out the average gap between invoice date and money landing. Most owners guess low. You cannot fix a number you have never looked at.
Start: charge interest you are already entitled to. You do not need the new Bill. Under existing law you can already claim statutory interest on overdue commercial invoices, and debt recovery costs on top. Most small businesses never do, because they are worried about the relationship. The relationship where they do not pay you.
Build: check who you are about to work for. 15% of businesses in the DBT survey said they have avoided a customer because of how they pay. That is not being difficult, that is underwriting. Large firms have to publish their payment performance. Look before you quote.
Build: make paying you the easy option. Terms on the quote, not just the invoice. Invoice the day the job finishes, not at month end. A payment link, not bank details in a PDF. None of this is marketing and all of it is cash.
Scale: only then worry about the phone. If your money is arriving on time and you still have gaps in the diary, that is a marketing problem and it is worth spending on. Until then it is not.
The Whito view
We write about marketing. So it would be convenient for us to tell you that a quiet phone is always a marketing problem.
It is not. Fourteen thousand businesses a year close with work on the books. They did not need a better website. They needed the money they had already earned.
Structure before scale. Getting paid is structure.
Frequently asked questions
How much do late payments cost the UK?
Almost £11bn a year, according to Department for Business and Trade research published in 2025. At any given moment UK businesses are owed around £26bn in late payments.
How many businesses close because of late payment?
About 14,000 a year, which the government describes as 38 businesses every day. Higher figures circulate, but 14,000 is the number in DBT’s published research.
What proportion of invoices are paid late?
44% of SME invoices, according to evidence given to the House of Commons Business and Trade Committee and cited in the House of Lords Library briefing on the Bill.
Is the 60 day payment cap law?
No. The Commercial Payments Bill was introduced in the House of Lords on 19 May 2026 and had its second reading on 9 June 2026. It is still going through Parliament. Until it passes and comes into force, nothing in it applies to you.
Can I charge interest on a late invoice right now?
Yes. Statutory interest on overdue commercial debts already exists under current law. The government describes the new Bill as building on the Late Payment of Commercial Debts Act 1998, which is over 25 years old. The difference is that the Bill would make interest mandatory rather than something you choose to claim, and most small businesses never claim it.
Sources
- Department for Business and Trade, Late payments research: impact on the UK economy, published 30 July 2025.
- Department for Business and Trade, Largest crackdown on late payments in over 25 years as landmark Bill enters Parliament, 19 May 2026.
- House of Lords Library, Commercial Payments Bill [HL]: HL Bill 4 of 2026-27, 4 June 2026.
- UK Parliament, Commercial Payments Bill [HL] bill page.
