Two pieces of legislation, one underlying question for UK finance teams: comply piecemeal, or fix it once
Two pieces of UK legislation are moving through Parliament and Whitehall in parallel, and it is worth UK finance leaders reading them together rather than as separate compliance projects. The Commercial Payments Bill, which completed its Committee Stage in the House of Lords on 21 July 2026, will cap payment terms in most commercial contracts at 60 days, introduce mandatory interest at 8% above the Bank of England base rate on late payments, and hand the Small Business Commissioner stronger investigative and enforcement powers. Running alongside it, HMRC and the Department for Business and Trade are working through the stakeholder co-design phase of the UK’s e-invoicing mandate, which will require all VAT-registered businesses to exchange structured invoices, most likely over Peppol, by 1 April 2029.
These are two different bills with two different sponsors, but they are responses to the same problem. Late commercial payments cost the UK economy an estimated £11 billion a year and contribute to the closure of 38 businesses every day, according to research from the Department for Business and Trade and the Small Business Commissioner. As many as 60% of SMEs with a valid reason to pursue redress, such as claiming interest on a late payment, never do, largely because of the power imbalance between smaller suppliers and the larger customers they depend on.
I sit on the UK eInvoicing Advocacy Lab (UKeLab) alongside other industry professionals working directly with HMRC and DBT on the shape of the mandate, and Tradeshift responded formally to the government’s 2025 consultation on e-invoicing. UKeLab’s upcoming position paper on late payments makes a point that is easy to miss in the policy debate: e-invoicing is a powerful enabler of faster, fairer payment, but on its own it is not a silver bullet. Regulation and digitisation need to move together. That is the conversation I want to open here, specifically for the finance and procurement teams now deciding what to do about both bills at once.
If you are already working through UK e-invoicing readiness, or want a sense of what “good” looks like across compliance and AP automation, our team is glad to talk it through. Get in touch here.
Two bills, one root cause
The Commercial Payments Bill (HL Bill 4, 2026–27) is the more immediate of the two. Having cleared its second reading and now its Committee Stage in the Lords, it caps payment terms at 60 days for most contracts between businesses (30 days for public sector purchasers), voids terms that try to go beyond that limit in favour of an implied 30-day term, and gives suppliers a fixed right to compensation where a dispute is raised late or without enough information. It builds on payment practice reporting rules already in place: since January 2026, large companies publicly reported not just their average time to pay, but the proportion of invoices settled within 30 days, between 31 and 60 days, and beyond 60 days.
None of this addresses why payments run late in the first place. On the ground experience and being involved in countless digitalisation programs points to common causes for most large organisations: blanket payment terms, weak visibility into the health of the long tail of smaller suppliers, and processes where a fairly small invoice can get lost inside a large multinational’s approval chain. Regulation can force better behaviour where it is wilful. It is much less effective against behaviour that is simply the result of poor process and poor data, which is exactly where e-invoicing and automation earn their keep.
What e-invoicing changes, and what it doesn’t
The case for e-invoicing as a payment accelerator is well evidenced. Billentis puts the typical reduction in SME payment times at 5 to 7 days once e-invoicing is adopted. Sage’s research finds a 4-day average reduction in payment time and 20% fewer late payments among SME users. The Small Business Commissioner’s own figures suggest SMEs moving to e-invoicing can save an average of £11,000 a year in administrative cost. Purchase to Pay Network’s 2026 annual survey found organisations with predominantly manual processing pay £11 to £15 per invoice to process, against £2 to £5 for e-invoicing adopters, and that those adopters run average supplier payment terms of 20 to 30 days, compared with 50 to 60 days for the manual majority.
The mechanism is straightforward: structured, machine-readable invoices can be validated, matched, and approved automatically; disputes and queries drop because the data is correct at source; and status visibility means everyone in the chain knows where an invoice sits and when it is likely to be paid, rather than finding out by chasing an email thread. The UK’s chosen backbone, Peppol, adds a further benefit for smaller suppliers specifically: its four-corner model means a business connects once and can reach any other business on the network, rather than enrolling separately in every customer’s own portal.
What e-invoicing does not do, on its own, is change the intent of a buyer with longer terms and manual processes. Faster invoice processing does not automatically produce faster payment. The counter-argument, and the one I find more persuasive in practice, is that once the whole invoice-to-pay process is transparent, accurate, and cheap to run for everyone, the economics stop inherently favouring delay. The cost savings and cash flow benefits of a well-run digital process are not evenly distributed.
The decision in front of you isn’t ‘which Peppol provider’, it’s which platform
Here is where I think most UK businesses are about to under-scope the decision in front of them. Faced with a 2029 deadline, the easy answer is to treat it as a connectivity problem: pick a certified Peppol access point, get the technical box ticked, move on. That will satisfy the letter of the mandate. It will not do much for the 60-day payment problem sitting alongside it, and it will leave you no better placed for the other compliance obligations most mid-sized and larger UK businesses are already juggling.
Consider what is actually converging on a finance team’s desk at the same time: the UK mandate itself, still finalising its technical standard (PINT UK, built on the EN 16931 core, is the leading candidate); the EU’s ViDA reforms updating that same EN 16931 standard from July 2030, relevant to any UK business trading into the EU or through Northern Ireland under the Windsor Framework; and, if you trade internationally at all, mandates already live or landing in markets like France, Belgium, Poland, Spain, and Australia, each with its own format and timeline.
A Peppol access point solves connectivity for one leg of that picture. It does nothing for invoice status visibility, payment-term monitoring, dispute tracking, or the AP automation that turns compliant data into faster processing. This is the argument I would make to any UK finance leader right now, and it is not really a Tradeshift pitch, it is a sequencing argument: 2029 is a forcing function that most businesses only get every few years.
You are going to touch your invoicing and payment systems whether you like it or not. The question worth asking before you sign anything is whether you want to solve this narrowly, market by market and requirement by requirement, or use the mandate as the trigger to consolidate onto a single platform that keeps pace with legislative change across every market you operate in, gives you and your suppliers shared visibility into where an invoice and a payment actually stand, and turns the compliance spend into an automation and cash-flow benefit rather than a pure cost.
If you operate in more than one country, the maintenance burden of running several point solutions, each tracking its own local rule changes, compounds quickly. One platform that already operates across multiple compliance regimes removes most of that overhead by design.
Tradeshift has been a certified Peppol Access Point since 2014 and supports compliance in 70 countries from a single platform. If it is useful to compare notes on what a consolidated approach looks like in practice, get in touch.
Streamlining Disputes
The Commercial Payments Bill removes the ability to withhold payment via late-stage disputes. Buyers must now raise detailed disputes at least eight days before the due date. Failure to do so, or providing insufficient detail, triggers a penalty of £40 or 1% of the invoice value (whichever is higher). This forces AP teams to identify discrepancies much earlier in the cycle to avoid automatic liabilities.
Digital networks like Tradeshift mitigate this risk by replacing ambiguous PDF arrival dates with structured, timestamped Peppol data. Automated 2-way and 3-way matching highlighting discrepancies within hours of receipt, ensuring disputes are identified and raised well within the legal 8-day window. Specifically, Tradeshift’s collaboration layer gives suppliers real-time visibility into where their invoice sits in the buyer’s approval and matching workflow, so a discrepancy surfaces as a two-way conversation on the invoice itself rather than a dispute notice arriving cold near the due date. Because both parties see the same invoice status, PO references, and comments in one shared record, questions get resolved collaboratively and quickly, often before a formal “dispute” is even needed. That shared visibility also means when a dispute is raised, it’s documented directly against the invoice with full context and timestamps, giving both sides an audit trail that supports compliance with the Bill’s 8-day notice and detail requirements.
By automating the generation and routing of compliant dispute notices, digital networks platform create a provable audit trail that converts a significant compliance risk into a streamlined, low-intervention workflow.
The UK isn’t fixing this in isolation
Late payment is not a uniquely British problem. The EU Payment Observatory’s 2025 Annual Report found that more than half of European companies experienced difficulties from delayed payments in 2024, with average payment periods exceeding 60 days in both B2B and government-to-business transactions, and that longer contractual terms were linked to longer actual payment periods in 87% of cases. Poland (72%), Luxembourg, and Czechia (69% each) reported the highest incidence of companies affected; the Netherlands (31%) and Bulgaria (35%) the lowest. Most companies surveyed by the European Commission supported a mandatory maximum payment deadline between businesses, which is precisely the direction the UK is now taking.
Japan offers the longer-run evidence that regulation plus digitisation compounds: under its Act against Delay in Payment of Subcontract Proceeds, late payment incidence fell from 25% to 12% over 18 years of sustained, proactive enforcement. That is the timeframe worth keeping in mind. The Commercial Payments Bill and the 60-day rule will not fix payment culture on their own, any more than e-invoicing will. Both together, sustained over years rather than one Budget cycle, is what has actually worked elsewhere.
Getting ready for both deadlines at once
None of this needs to wait for Royal Assent or for HMRC’s final technical specification. A few things are worth doing now, regardless of exactly how PINT UK settles:
- Audit how invoices and payment data actually move today, including where PDF or manual steps are hiding inside processes that look automated on paper.
- Map your supplier base by size and criticality, not just by spend, so you know where the late-payment and onboarding risk actually concentrates.
- Treat invoice and payment status visibility as a requirement, not a nice-to-have. Both bills reward businesses that can demonstrate, quickly, when an invoice was received and when it was paid.
- Agree what “paid” actually means. Suppliers usually mean cleared funds; large buyers often mean “included in the next payment run.” That gap causes more disputes than it should.
- Before choosing a Peppol access point or connectivity vendor in isolation, scope the decision against your full compliance footprint, UK, EU, and any other market you trade in, and against your AP automation ambitions, not just the mandate’s minimum requirement.
- Bring finance leadership into the conversation early. The mandate and the Bill both land on finance operations far more than on IT.
Tradeshift has spent over a decade helping businesses through mandates like this one, in France, Belgium, Poland, Romania, Australia, and elsewhere, and we have been a certified Peppol Access Point since 2014. That experience, and Tradeshift’s seat at the table in the UK’s own consultation and working groups, is why I am confident in saying the UK’s two bills are best treated as a single decision, not two. Whether you use that moment to talk to us or to someone else, it is worth having the conversation now rather than in 2028.