“It’s time for the UK’s small businesses to be paid on time,” wrote Blair McDougall, Minister for Small Business and Economic Transformation, in a letter to CEOs and CFOs on Tuesday 24 March 2026. Published by the Department for Business and Trade, the note confirms ministers’ next steps to clamp down on late payment. (assets.publishing.service.gov.uk)

For Northern firms that have long bridged 60–90 day waits, the package matters. Ministers say they intend to impose a maximum 60‑day payment term with only narrow exemptions; introduce time limits for raising disputes; and make every day an invoice goes unpaid expensive for the customer, not the supplier. (assets.publishing.service.gov.uk)

Interest on overdue invoices would be paid at 8% above the Bank of England base rate-bringing statutory interest into sharp, routine use rather than theory-while strictly limited carve‑outs to the 60‑day cap would apply where both parties are large companies, where the purchaser is the smaller party, or for import/export transactions. (assets.publishing.service.gov.uk)

Whitehall also wants stronger powers for the Small Business Commissioner (SBC): the ability to investigate poor payment behaviour, settle disputes outside the courts through binding decisions, and levy “significant financial penalties” on persistent offenders. Officials add that boards or audit committees at late‑paying large companies will be required to explain poor performance and the fixes they’ll make. (assets.publishing.service.gov.uk)

Construction-vital across Yorkshire, the North West and the North East-gets particular attention. Government proposes prohibiting the deduction of retentions in construction contracts, with a further consultation on how to implement the change. DBT’s consultation material points to amending the 1996 construction law framework to deal with retentions. (assets.publishing.service.gov.uk)

The scale of the problem is set out starkly: late payment costs the UK around £11bn a year, consumes 133 million hours in chasing, and contributes to 38 business closures every day. That reality is familiar to Northern manufacturers and contractors operating on tight margins and long supply chains. (assets.publishing.service.gov.uk)

Transparency is tightening too. Separate regulations already in force mean large companies must include headline payment performance in their Directors’ Reports for financial years beginning on or after 1 January 2026-bringing auditor and investor scrutiny to the issue. Updated government guidance also widens who must report twice‑yearly on payment practices. (legislation.gov.uk)

Ministers urge businesses to get ready now: set supplier terms at a maximum of 60 days unless an exemption applies; ensure systems can track and pay interest on late invoices; report payment data twice a year as required; and include payment performance headlines in annual reports from the 2026 financial year start. (assets.publishing.service.gov.uk)

Expect a firmer enforcement environment. Proposals include using payment‑reporting data to identify repeat offenders, with penalties linked to unpaid statutory interest, and heightened board‑level accountability. For Northern SMEs, that should mean fewer excuses from large customers and faster cash cycling through local supply chains. (gov.uk)

There’s carrot as well as stick. The SBC’s Fair Payment Code-already counting more than 550 awardees including household names-will continue to recognise firms that pay promptly. For owners from Preston to Teesside, the message is clear: tidy up terms now and keep cash moving so staff, suppliers and projects aren’t left waiting. (assets.publishing.service.gov.uk)