BESA Welcomes ‘Historic Day’ For Fair Payment

• Content
• Building Services
• BESA Welcomes ‘Historic Day’ For Fair Payment

02 June 2026

The Building Engineering Services Association (BESA) has welcomed the Small Business Protection (Late Payment) Bill recently announced in the King’s Speech.

The Bill is the culmination of a decades long campaign to remove the “scourge of late payment” that costs the UK economy £11 billion every year and leads to the closure of 38 small businesses every day, according to the government.

BESA added that late and retention payments had undermined construction supply chains for years and continued to hold back quality and innovation across the industry.

The government said the Bill would be “the most significant legislation to tackle late payments in over 25 years and will give the UK the strongest legal framework on late payments in the G7”.

It will impose maximum payment terms of 60 days, enforce mandatory interest for late payments at 8% above base rate, and introduce a time limit for raising invoice disputes, before payment is due.

The government has also pledged to take specific action to remove the widespread practice of deducting and withholding retention payments in the construction sector, which often wipe out SME and sub-contractor profit margins.

BESA said it was now crucial that the government kept up the momentum and moved to a second reading of the Bill so that it could become law and start providing protection for thousands of hard-pressed firms struggling to cope with a series of challenges in the current economic environment.

Other provisions in the Bill include forcing persistently late paying companies to publish details of their payment practices and intended actions to address them. It will also give the Small Business Commissioner new powers to investigate and potentially fine businesses suspected of persistent poor payment and adjudicate disputes between businesses outside the court process.

Debbie Petford, Legal and Commercial Director at BESA, said: “This is a historic day in our long battle against late payment and regressive practices in construction. There have been a series of voluntary codes of conduct and pledges from big businesses to mend their ways over the years, but we always felt that only proper, targeted legislation would really get to grips with the problem.

Petford added: “Late payment and retention clauses in contracts lead directly to business failures, job losses and poor quality buildings that directly impact health, wellbeing and safety. The government made this a key manifesto promise because of the regressive impact this has on employers all over the UK. Late and unfair payment undermines business confidence and investment so this Bill can play a significant role in driving economic growth.”

Picture: An image of a man sitting at a computer desk with his head in his hands.

Article written by Dave Mapps | Published 02 June 2026

Share

---

---

Related Articles

---