New research commissioned by the Department for Business and Trade says the UK’s planned small business payment rules would go further than comparable frameworks in the G7, the EU and other major economies.
For small suppliers, the useful point is not the international ranking itself. It is the direction of travel: the government is trying to move late payment from a relationship problem that small firms are left to manage privately into a regulated conduct issue with firmer deadlines, interest and enforcement.
The Small Business Commissioner said the Enterprise Research Centre reviewed payment laws across 20 jurisdictions. Its conclusion is that the UK’s Commercial Payments Bill, combining a mandatory 60-day payment cap, non-waivable interest and a more powerful Small Business Commissioner, is more comprehensive than any existing international framework reviewed.
That matters because late payment is rarely just an admin nuisance for SMEs. It affects payroll planning, stock purchases, supplier relationships, borrowing needs and the amount of time owners spend chasing invoices instead of winning work.
What the research found
The report points to Japan and the Netherlands as two models where sustained improvement has been linked to firmer rules and enforcement. Japan’s proactive government enforcement is reported to have reduced late payment incidence from 25% to 12% over 18 years. In the Netherlands, where payment terms are capped at 30 days when large companies pay small suppliers, the research says the country has the lowest rate of late payment difficulties in the EU.
The research also argues that transparency and voluntary approaches are not enough on their own. One recurring problem is that small firms often avoid formal claims because they do not want to damage relationships with larger customers. That leaves a gap between having rights on paper and being able to enforce them in practice.
For UK suppliers, that is the core issue to watch. If the Bill progresses as planned, the practical value will depend on whether the new framework gives small businesses confidence that payment terms, interest and enforcement can be used without turning every dispute into a costly legal fight.
How this differs from earlier late-payment reforms
BritishSME has already covered the Bill’s progress and the wider late-payment crackdown. The latest development adds a different piece of evidence: international comparison. It suggests that the UK package is being designed around stronger enforcement rather than relying mainly on disclosure, voluntary codes or civil court action.
That does not mean small firms should wait passively for the law to change. It does mean invoice discipline is becoming more important. Businesses that sell to larger customers should make sure their terms are clear, their purchase-order process is documented, and their credit-control records show when invoices were issued, chased and disputed.
Small firms may also want to review where payment risk is concentrated. A business with one or two large customers on slow terms can be exposed even if its headline sales look healthy. The most useful preparation is often basic: know which customers regularly push past agreed terms, which contracts contain lengthy payment windows, and where the business would feel cash pressure first.
What owners should watch now
The Small Business Protections (Late Payments) Bill was introduced to the House of Lords on 19 May 2026, so the detail can still change as it moves through Parliament. The headline areas to monitor are the proposed 60-day cap, how mandatory interest will work, what powers the Small Business Commissioner receives, and how accessible any adjudication or complaints route becomes for smaller firms.
This is also a useful moment to revisit earlier BritishSME coverage of what SMEs should check as late-payment reform moves forward and why late-payment reform remains a priority for the Small Business Commissioner.
The practical takeaway is simple: late payment is moving higher up the policy agenda, and the proposed rules are being backed by international evidence. Small businesses should use that momentum to tighten payment terms, improve invoice records and be ready to use stronger rights if and when they arrive.
Sources
Source: Small Business Commissioner.
