What changes for UK finance teams with the 60-day payment terms cap?

What has the government actually said?

In its response to the late payment consultation, last updated in July 2026, the government says it intends to:

• Cap payment terms at 60 days between businesses, with limited exemptions, starting no earlier than 2027 with a transition period.
• Make statutory interest mandatory in commercial contracts, at 8% above the Bank of England base rate.
• Give the Small Business Commissioner power to fine businesses that persistently pay late.
• Require board or audit committee commentary from persistently late-paying large companies on why, and what they are doing about it.
• Set a time limit for raising disputes about an invoice.

These are intentions, not law yet. The government says it will legislate as soon as Parliamentary time allows. Read the government response on GOV.UK.

Who does the 60-day cap apply to?

It is aimed at payments between businesses of different sizes. The planned exemptions cover contracts where both parties are large companies, where the buyer is the smaller party, and where the goods or services are imported or exported. If you are a mid-sized group paying many small suppliers, plan on being in scope, and check the detail with your advisers once the legislation is published.

Why does this matter now, if it starts in 2027 at the earliest?

Because the government puts the cost of late payment to the UK economy at almost £11 billion a year, with about 14,000 businesses closing as a result, and it means to act on that. Changing your terms is a contract change. Paying within them depends on your process, and process usually takes longer to fix.

Where do the days on an invoice actually go?

Rarely in the payment itself. They are lost in the waiting before payment:

• Sitting unread in a shared inbox, or entered late.
• Waiting for approval from a site manager.
• Held up by a mismatch with the purchase order or delivery note.
• Queried, with no one sure who is dealing with it.

With a statutory time limit for disputes coming, a query that sits for three weeks before anyone raises it becomes a risk as well as a delay.

What should finance teams do to get ready?

• List suppliers on terms longer than 60 days, especially smaller ones, and plan the change.
• Measure where invoices wait: inbox, approval, matching or queries.
• Capture invoices on the day they arrive, checked and coded. See the AP inbox.
• Route approvals by site and value, with cover for absences. See approvals that move.
• Match to orders and deliveries early, so disputes are raised in days, not weeks. See PO and delivery matching.

That is the Capture and Control part of Capture, Control, Close. Atlantas does not make payments: it gets invoices checked, approved and waiting in your accounting system as drafts, so your team can post and pay them on your own schedule. Plans start from £500 a month. See pricing.

Questions people also ask

When does the 60-day payment terms cap start?

No earlier than 2027, with a transition period. The government says it will legislate as soon as Parliamentary time allows.

Which contracts are exempt from the 60-day cap?

The government plans exemptions where both parties are large companies, where the buyer is the smaller party, and for imported or exported goods or services.

Will interest on late payment become mandatory?

The government intends to make statutory interest at 8% above the Bank of England base rate mandatory in commercial contracts.

Does Atlantas pay suppliers?

No. It captures, checks, codes and routes invoices for approval, then leaves a draft in your accounting system. Your team posts and pays.