Status: GOV.UK says the Commercial Payments Bill was introduced to Parliament in May 2026 and that lead-in and transition arrangements will be provided before powers come into force. The measures described below are proposals in the Bill, not a statement that every provision is already law.
The official Commercial Payments Bill overview sets out the government's intended approach after its consultation on late payment practices.
Measures described by GOV.UK
- Maximum payment termsThe Bill proposes maximum payment terms of 60 days, with strictly limited exemptions.
- Late-payment interestIt proposes mandatory interest at 8% above the Bank of England base rate for late payments.
- Late disputesSuppliers would have a right to a fixed sum where a purchaser raises a dispute late or without sufficient information.
- Construction retentionsThe overview proposes prohibiting deduction and withholding of retention payments under construction contracts, with further consultation on implementation timing.
- Enforcement and reportingThe Bill proposes stronger powers for the Small Business Commissioner and new reporting requirements for large businesses.
Why construction teams should pay attention
Ventilation and ductwork packages often pass through several commercial tiers. Payment terms, application dates, notices, variations and retention can therefore affect cash flow and administration throughout the supply chain. The proposed changes increase the value of consistent records and clearly defined payment processes.
Practical preparation before the rules change
- Map current payment terms and retention clauses across standard subcontract templates.
- Check that application, assessment, notice and payment dates are recorded consistently.
- Make variation instructions and supporting records easy to trace.
- Record disputes promptly with enough information to explain the issue.
- Monitor the Bill and implementation guidance rather than changing contracts on the basis of headlines.
- Take project-specific legal or commercial advice where needed.
What this does not change today
This article is an operational summary, not legal advice. Existing contracts and legislation continue to require project-specific review. The GOV.UK factsheet says the new measures will not apply retrospectively and that businesses will receive lead-in time. Teams should verify the Bill's current parliamentary status and final text before treating any proposal as effective.
Connection to ventilation procurement
A clearly defined installation package supports more accurate applications and change records. Before award, record scope, supply responsibility, drawing basis, programme assumptions and the process for instructed change. Our prequalification checklist and scope guide provide practical prompts.