An end to late payments for freelancers?

Last Updated on 1 August 2025

Late payments are always a hot topic on my training courses.

For any freelancer who sends out an invoice, it can feel like dropping a stone down a well and waiting to see when (if?) there’ll be a splash.

I even have a whole help sheet on the topic:
Help sheet 13: Late Payments and how to avoid them >

But look! Good news!

On 31st July 2025 the government released a plan for small and medium-sized businesses, and top of the list is late payments.

You can read all the documents here, but in summary:

• There will be new legislation to make 60 payment terms the maximum allowed, possibly reducing to a 45 day cap in the future.
• Interest will be applied automatically to late payments.
• Fines for repeat offenders

This proposal of mandatory late payment interest is particularly important for sole trader or limited company freelancers.

We already have late payment legislation, introduced in 1998 by the then new Labour government. But many freelancers feel reluctant to use it in case they are seen as pushy by clients.

Making late payment charges automatic would sweep that worry away.

Combine all this with e-invoicing and you can see how it might work.

Read my earlier blog on e-invoicing:
Next on the digital horizon: e-invoicing >

When might this happen?

In the hurly-burly of political reporting, it’s easy to forget that we’re still at the start of this government’s five-year term.

So the chances of this getting into law over the next 4 years are high.

Posted on 01 August 2025