The new rules will come into force from April 2027 at the earliest, with the government saying it is determined to ‘hold big businesses and persistent offenders to account’.

A major shakeup of late payment rules will impose maximum payment terms of 60 days on invoices to SMEs and interest will be charged on all late payments at 8% above the Bank of England base rate, so 11.75% under the current rate.  

Legislation will be introduced ‘as soon as parliamentary time allows’, the government said, with more details to be expected in the King’s Speech.

This will affect large businesses with turnover above £54m, balance sheet threshold above £27m and/or 250 employees under The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024.