The 60-day cap has a second edge — and it lands on your board
Daily FinTech Lesson
On 24 March 2026 the government published its response to the Time to Pay Up consultation and confirmed the biggest change to UK late-payment law since 1998. The headline is a hard 60-day ceiling on B2B payment terms. The part most operators are missing is the second edge: the same package moves payment performance out of the accounts-payable function and onto the board’s desk — and attaches personal exposure to directors who get the reporting wrong.
Here is what was actually confirmed.
A 60-day maximum. Large firms paying smaller suppliers face a statutory ceiling of 60 days, with strictly limited exemptions — broadly, where both sides are large, or in certain international trade. It is a ceiling, not a default: shorter agreed terms still stand, and the mooted reduction to 45 days has been shelved for now. Expect it to bite no earlier than 2027, carried by the Commercial Payments Bill, which had its first reading in the Lords on 19 May 2026.
Mandatory interest you cannot contract out of. Every commercial contract will carry a right to statutory interest at 8% above the Bank of England base rate, and the current ability to substitute a softer remedy is being removed. This is the change to act on today. The right largely exists already; most firms simply never write it in.
A statutory dispute window. Businesses will get a fixed period to dispute an invoice — proposed at 30 days. Miss it and the invoice stands, with compensation owed. This is aimed squarely at the manufactured, late-in-the-cycle dispute used to reset the payment clock.
And this is the one to internalise — board-level accountability. Boards or audit committees of large companies and LLPs must review payment performance, comment on it, and publish it inside the annual Directors’ Report, not just file it on a government portal. Persistent late payers must publish an explanation and the remedial action they are taking. The Small Business Commissioner gains powers to investigate, adjudicate, fine persistent offenders, and engage boards directly.
Where the “personal accountability” actually sits. There is no new personal fine for the act of paying a supplier late. The personal exposure attaches to the reporting: directors can face sanctions for failing to disclose payment performance, or for disclosing it inaccurately. In practice that lands on the finance function. The Finance Director owns the payment data, the approval-to-pay cycle, and the numbers that flow into the Directors’ Report — so the FD becomes the de facto owner of a governance obligation, not merely an operational one. Under the Companies (Directors’ Report) (Payment Reporting) Regulations 2025, that disclosure is already required for financial years beginning on or after 1 January 2026.
So what should an operator do now.
If you are a supplier: put the statutory interest clause into every contract and invoice, set your own terms at 30 days or shorter, and treat the 60-day ceiling as the worst case you tolerate from a large customer — never a target. The leverage has shifted towards you. Use it, in writing.
If you are a payer, or growing into a large company: this is a finance-led governance project, not an AP tidy-up. Map every contract where your approval-to-pay cycle runs past 60 days and tighten it now. Then make sure whoever owns your Directors’ Report can stand behind the payment numbers before an auditor — or the Commissioner — does.
The lesson: the reform reframes late payment as a matter of corporate conduct. Treating it as a cash-flow inconvenience is how a finance lead ends up personally answering for a disclosure they never controlled.
