SNIPEF welcomes plans to tackle late payment and unfair retention practices
May 19, 2026
New legislation has been announced to tackle late payments and unfair retention practices with the aim of protecting the financial security of British businesses.
The announcement came during the King’s Speech, in which Charles III shared his broader vision for economic growth in the country, including new legislation to tackle late payments [Small Business Protections (Late Payments) Bill].
Following the announcement that the UK Government will bring forward this new legislation, Fiona Hodgson, Chief Executive of SNIPEF, welcomed the move – calling the plans “long overdue”.
She said: “SNIPEF welcomes the UK Government’s commitment to tackling late payment and unfair retention practices within the construction supply chain.
“For many plumbing and heating businesses, particularly SMEs, delayed payments and withheld retentions continue to place unnecessary pressure on cash flow, investment and apprenticeship recruitment.”
The Bill fundamentally changes how businesses pay each other, putting an end to excessive delays and unfair practices that hit small firms hardest, through sweeping new reforms.
Reforms include a clear 60-day cap on payment terms on all large firms paying smaller suppliers, mandatory interest on late payments, set at 8% above the Bank of England base rate, and a ban on the practice of withholding retention payments under construction contracts.
Fiona added: “The plumbing and heating industry, and the wider construction sector, have waited a long time for meaningful reform in this area, and stronger protections for smaller businesses are overdue.
“However, it is essential that any changes do not simply replace one burden with another. Reforms must be practical, proportionate and avoid creating costly or complex alternative arrangements that could disproportionately impact SMEs and specialist contractors.
“Improving payment certainty and fairness across the supply chain is critical, but the detail of implementation will determine whether these reforms genuinely support smaller businesses in practice.”
