Please see below for a summary of payment terms in the United Kingdom and the various industries across which payment term legislation appears. You can also download a summary of all British payment terms by clicking the button below.
The Late Payment of Commercial Debts (Interest) Act 1998, Section 4, was amended in 2013 to enact a maximum term of 30 days for public authority payments and 60 days for commercial terms, unless expressly agreed by both parties and not grossly unfair. Where no terms are specified in the contract the term is 30 days. Compensation for recovery costs is also provided.
Section 110 of the Housing Grants, Construction and Regeneration Act 1996 applies the ‘Scheme for Construction Contracts’ where a construction contract fails to provide a payment term. The scheme terms are 7, 17 and 30 days depending on the type of payment.
The Prompt Payment Code underwent changes in 2021. Administered by the Small Business Commissioner a new commitment of payment within 30 days, down from the previous maximum of 60, must be made by the CEO or Finance Director.
The Grocery Supply Code of Practice, which applies to supermarkets with a turnover of more than £1 billion, requires no delay in payments and within a reasonable time after the date of the supplier’s invoice.