Empowering Our Supply Chain with the New Late Payment Reforms

Running a specialised business in the superyacht sector is demanding enough without having to act as a free credit facility for larger contractors. On March 24, 2026, the UK Government unveiled the toughest crackdown on late commercial payments in over a generation. Aimed at resolving a systemic issue that costs the UK economy £11 billion annually and forces 38 businesses to close their doors every single day, this legislation

brings critical relief to smaller enterprises.

For the extensive network of service providers operating across our supply chains, consistent cash flow is the lifeblood of innovation. The newly announced legislation introduces a strict 60-day cap on payment terms for all large firms paying smaller suppliers. This absolute maximum ensures that businesses are paid in a reasonable timeframe, freeing up capital to invest in new technologies, hire apprentices, and continue bringing together the globally renowned quality and excellence of the superyacht industry around the British Isles.

A monumental shift in this announcement is the empowerment of the Small Business Commissioner. The office now holds sweeping new authority to investigate poor payment practices, adjudicate disputes, and levy multi-million-pound fines against persistent offenders. Furthermore, large companies that consistently fail to pay on time will have their boards and audit committees held publicly accountable, as they will be required to publish explanations and remediation plans directly in their annual reports.

Crucially, the government is introducing mandatory statutory interest on late payments. All commercial contracts will soon require interest to be set at 8% above the Bank of England base rate, alongside a standard £100 compensation fee. For example, if a marine contractor is waiting on a £10,000 invoice, a 60-day delay past the agreed terms will automatically result in an additional £293.15 owed. This creates a severe financial deterrent for large entities that habitually delay settling their accounts.

Additionally, proposals to ban the withholding of retention payments in construction contracts could offer vital protection to members involved in shipyard refits, marina developments, and infrastructure expansion, shielding them from upstream insolvencies.

British Superyacht CEO Richard Selby said "We have been aware of small businesses being driven to extinction due to large companies failing to pay up on time. While these legislative changes provide a robust safety net, proactive adaptation is essential. It is highly recommended that our SME members review all active commercial contracts to ensure these new statutory interest clauses are seamlessly integrated once enacted. Updating invoicing software to automatically calculate the new 8% plus base rate interest on overdue accounts will streamline administrative tasks. Maintaining an open dialogue with larger clients about these incoming legal shifts can also help reset payment expectations gracefully before a dispute arises".

These landmark reforms shift the balance of power, drastically reducing the hours wasted chasing unpaid debts. By guaranteeing fair and timely compensation, our entire network becomes more resilient, collaborative, and capable of sustainable growth. We are stronger together in leading the industry, and these new protections will ensure that the specialised enterprises at the heart of our sector have the financial stability they rightfully deserve.

More information can be found here