Commercial Payments Bill offers future relief but hauliers must fix cashflow discipline right now

Late payment costs the UK economy £11bn a year, and 38 UK businesses close every day. Those are the government’s own figures, and they sit behind the Commercial Payments Bill now progressing through parliament.

Few sectors recognise that arithmetic faster than road haulage, where the fuel, the wages and the vehicle finance all go out long before the invoice comes in.

What the bill proposes

• A maximum payment term of 60 days with strictly limited exemptions
• Mandatory interest on late payments at 8% above the Bank of England base rate
• A ban on withholding retention payments under construction contracts
• A right to a fixed sum where a purchaser raises a dispute late or without enough information, which is the provision aimed squarely at the tactic of querying an invoice on day 58

It is a bill, not an act

This matters and it is usually lost in the coverage. It was introduced in May 2026, it is still before parliament, and there would be a lead-in and transition period before the powers took effect. Nothing in it helps you this quarter. Any operator building a cashflow forecast on the assumption that terms shorten next year is forecasting on a hope.

The risk that 60 days becomes the target

Here is the part worth thinking about before it happens. A statutory maximum tends to become a norm. A customer currently paying in 30 days, who reads that Parliament considers 60 days acceptable, has been handed an argument for moving to 60. That is not a reason to oppose the Bill. It is a reason to fix your terms in writing now, while 30 days is what your contract says, rather than renegotiating after a maximum has been legislated.

The operators who will be worse off are the ones on good terms who let those terms drift toward a new statutory benchmark.

Why haulage is structurally exposed

Three things compound in this sector specifically. The cost base is front-loaded. Diesel is paid at the pump, drivers are paid weekly or monthly, and the vehicle finance does not wait for the customer. Customer concentration is high. A haulier with three large customers cannot enforce terms against any of them without risking the relationship, which is the practical reason statutory rights go unused.

Subcontracting passes the problem down. An operator paid at 60 days who subcontracts overflow work is either financing the subcontractor or passing the delay on, and both have consequences.

The existing right to statutory interest has been available for years and is rarely claimed, for exactly the reason above. A right you cannot exercise without losing the customer is not much of a right, and a mandatory version changes that only if it is genuinely automatic.

What actually helps this quarter

The unglamorous things, all of which are inside your control. Invoice on the day the job completes, not at the end of the month. A week of internal delay is a week of financing you volunteered for. Get the paperwork right first time. In this trade the commonest reason an invoice is not paid is that the proof of delivery is missing, illegible or attached to the wrong job. That is a dispute you handed the customer.

Agree terms in writing before the first load, including what triggers the clock. “30 days from invoice” and “30 days from month end” are three weeks apart. Chase on a schedule, not on a feeling. A short, dated, unemotional sequence beats a difficult phone call in week nine. Know your exposure per customer. The number that matters is not total debtors. It is how much you would lose if your largest customer stopped paying tomorrow.

The VAT point nobody enjoys

One consequence specific to being paid late that operators consistently underestimate. On standard VAT accounting, the VAT on a sales invoice falls due by reference to the tax point, not by reference to when the customer pays. So a business invoicing in March and being paid in June has handed HMRC the VAT on money it has not received. Cash accounting exists for exactly this and it is not universally better. It changes when input tax is recovered too, and the comparison depends on your own payment behaviour as well as your customers’.

It is worth working out properly rather than assuming, as part of reviewing your VAT registration and scheme choice, because for a business routinely paid at 60 days it can be the single largest working capital decision available.

The summary

The bill is real, the problem it addresses is real, and neither of those makes it help before it is law. What helps now is the discipline of invoicing quickly, documenting correctly and knowing which customer represents the risk. Those are the things that were always within reach, and they are the things a statutory maximum will never do for you.

Harvey Dhillon, founder and CEO, Zmartly