UK late payment statistics (2026)
The verified numbers on what late payment does to UK small businesses — every figure linked to its source, labelled with what it measures and when it was published. Last reviewed 19 August 2026.
Headline figures
£11 billion a year
What late payments cost the UK economy annually — the number stamped on every piece of the government's 2026 reform push. Department for Business & Trade, March 2026.
38 businesses close every day
Roughly 14,000 UK businesses a year shut down because they are not paid on time. London Economics for DBT & the Small Business Commissioner, July 2025.
133 million hours a year
Time UK businesses spend chasing late payments — hours spent being an unpaid credit controller instead of doing the work. DBT ministerial letter, March 2026.
£26 billion
Owed to UK businesses in late payments at any given moment — the standing stock of overdue invoices. London Economics for DBT & the Small Business Commissioner, July 2025.
£17,000
The average amount owed to each business affected by late payment. London Economics for DBT & the Small Business Commissioner, July 2025.
1.5 million businesses (28%)
How many UK businesses are affected by late payments each year. London Economics for DBT & the Small Business Commissioner, July 2025.
61%
Small firms saying late payments hold their business back from its full potential; 45% saw more late payments than a year earlier. FSB & GoCardless, Late Payments Report (2,298 firms surveyed), March 2025.
£5,230
The average amount currently owed to a UK freelancer; 35% weren't paid on time by a client in the previous 12 months. IPSE, late payment in the self-employed sector, 2024.
£22,000 a year
The average annual cost of late payments per SME — the running cost of financing other people's cash flow. Smart Data Foundry, cited by DBT, September 2024.
52% per quarter
Small firms hit by late payment in an average quarter of 2022 — about 2.8 million firms. FSB research, cited by DBT, September 2024.
The 2026 reform package
On 24 March 2026 the government published its response to the late payments consultation — more than 850 responses, the most it has ever received on the topic — and confirmed a package it calls the largest crackdown on late payments in over 25 years: consultation response.
- A maximum of 60-day payment terms, with strictly limited exemptions
- Mandatory statutory interest on all late commercial payments at 8% above the Bank of England base rate
- Powers for the Small Business Commissioner to investigate, adjudicate and fine persistent late payers
- Time limits for disputing invoices, and board-level reporting for persistently late-paying large companies
The measures entered Parliament on 19 May 2026 as the Small Business Protections Bill: gov.uk announcement. Until the new regime is in force, the existing statutory right applies: 8% above base rate plus fixed compensation, claimable today without any contract clause.
What late payment costs in interest — a worked example
Take a typical £5,000 invoice. Under the Late Payment of Commercial Debts (Interest) Act 1998, statutory interest accrues at the Bank of England base rate plus 8% — 11.75% a year as of 19 August 2026 — calculated daily (£5,000 × 11.75% ÷ 365 × days overdue), plus £70 fixed compensation for debts between £1,000 and £9,999.99:
- 30 days overdue: £48.29 interest + £70 compensation = £118.29 on top of the invoice
- 60 days overdue: £96.58 interest + £70 compensation = £166.58 on top of the invoice
- 90 days overdue: £144.86 interest + £70 compensation = £214.86 on top of the invoice
Work out the figure for your own invoice — and get a ready-to-paste chaser paragraph citing the Act — with the free UK late payment interest calculator.
Which number should you quote?
Late payment statistics get blended into nonsense more often than almost any business topic, because the studies measure different things. A quick map:
- £11bn a year is a flow — the annual cost to the economy. £26bn is a stock — what is owed at a moment in time. They are not competing estimates of the same thing.
- £17,000 is the average owed per affected business (2025); £22,000 is the average annual cost per SME (2024, different study); £5,230 is freelancers only (IPSE). Label the population.
- 52% affected is per quarter (FSB, 2022); 28% is per year (London Economics, 2025). The time base differs — neither is wrong.
- Business closures: the current official figure is ~14,000 a year (38 a day) from the 2025 London Economics research; the older FSB estimate of 50,000 a year still circulates — cite it only with its year.
Citing these figures
Journalists, researchers and bloggers are welcome to cite this page. Each figure above links to its primary source — cite the source for the number, and link https://invoicepaid.app/uk-late-payment-statistics for the collection; it is reviewed and updated as sources publish new data. Attribution: “via invoicepaid.app”.
Frequently asked questions
How much do late payments cost UK small businesses?
The Department for Business & Trade puts the cost to the UK economy at £11 billion a year (March 2026), with £26 billion owed to businesses at any given time and an average of £17,000 owed per affected business (London Economics research, July 2025). At the level of a single firm, Smart Data Foundry research cited by the government puts the average annual cost of late payments at around £22,000 per SME.
How many UK businesses are affected by late payment?
About 1.5 million businesses — 28% — are affected each year, according to London Economics research for the government (July 2025). Survey-based numbers run higher because they measure shorter periods: FSB research found 52% of small firms were hit in an average quarter of 2022. The most severe consequence is closure: roughly 14,000 businesses a year — 38 every day — shut down because of late payment.
What do the 2026 late payment reforms change?
The package confirmed on 24 March 2026 — now in the Small Business Protections Bill before Parliament — caps payment terms at 60 days, makes statutory interest at 8% above the Bank of England base rate mandatory on late commercial payments, gives the Small Business Commissioner powers to investigate and fine persistent late payers, and sets time limits for disputing invoices. The government calls it the largest crackdown on late payments in over 25 years.
What interest can I charge on a late invoice today?
Under the Late Payment of Commercial Debts (Interest) Act 1998, B2B invoices already accrue statutory interest at 8% above the Bank of England base rate — 11.75% a year right now — plus fixed compensation of £40, £70 or £100 per invoice depending on the debt size. You do not need it written into the contract. Our free late payment calculator works out the exact figure and writes the chaser-email paragraph for you.
Where do these numbers come from?
Every figure on this page links to its source: government publications (DBT, the Small Business Commissioner), commissioned research (London Economics), and named industry surveys (FSB, IPSE, Smart Data Foundry). Different studies measure different things — a yearly cost is not a standing stock of debt, and a per-quarter share is not a per-year share — so each figure is labelled with its measure, source, and date, and we never blend them.
Owed money right now?
Turn the statistics into a number on your invoice
The free calculator applies the statutory rate and compensation to your invoice and writes the chaser email paragraph. If the invoice itself is the problem, start with the free UK invoice template.