UK Late Payment Statistics 2025: What the Data Tells Us
Late payment remains one of the most persistent financial challenges facing UK businesses. The data published by the Chartered Institute of Credit Management, Atradius, and other authoritative bodies each year consistently shows that the problem is widespread, sector-spanning, and disproportionately damaging to smaller businesses. Understanding the statistics is the first step to managing the risk they represent.
What Is Days Beyond Terms (DBT)?
Before examining the statistics, it is worth understanding the key metric used to measure late payment across UK businesses. Days Beyond Terms (DBT) is the number of days, on average, that businesses are paid after their agreed payment terms have expired. A DBT of zero means all invoices are paid exactly on the due date. A DBT of twenty means the average invoice is paid twenty days late.
DBT is calculated by subtracting the agreed payment period from the actual average collection period. So a business with thirty-day payment terms that collects payment after an average of forty-eight days has a DBT of eighteen. The figure is used by credit reference agencies, the CICM, and researchers such as Atradius and Intrum to track payment behaviour over time and across sectors.
It is important to note that DBT measures the average — individual invoice payment times can vary considerably around this figure. A business might have a DBT of fifteen but individual invoices that run to sixty or ninety days overdue, particularly from a small number of problem debtors.
UK Late Payment Statistics by Industry Sector
Late payment rates vary considerably across industry sectors in the UK, as the CICM's Payment Practice Barometer and Atradius's annual B2B Payment Practices Barometer both demonstrate. Sectors with complex supply chains, project-based billing, or significant public sector exposure tend to have the longest payment periods.
Construction consistently records among the highest DBT figures of any sector in the UK. This reflects a combination of factors: application-for-payment billing cycles, retention practices, lengthy approval chains, and the prevalence of subcontracting structures where payment at each tier depends on payment flowing down from the tier above. The Construction Act (Housing Grants, Construction and Regeneration Act 1996, as amended in 2011) provides some statutory protections, but delays remain endemic.
Professional services, recruitment, and business services also tend to experience above-average DBT figures. Public sector customers, while governed by the Prompt Payment Code and a thirty-day statutory payment obligation, do not always meet this standard in practice — and the size imbalance between a government body and its smaller suppliers means that smaller businesses are often reluctant to escalate.
Which Industries Have the Best Payment Records?
Not all sectors are equally problematic. The CICM's data consistently shows that retail, wholesale trade, and utilities tend to have lower DBT figures — partly because these sectors often operate on shorter supply chains with well-established payment systems, and partly because the high transaction volumes create commercial pressure to resolve disputes quickly.
Health and social care, education, and public administration also tend to record shorter payment periods in the data — though this partly reflects the fact that these sectors have been subject to government-mandated prompt payment initiatives in recent years, rather than a natural improvement in payment culture.
The general pattern that emerges from the annual data is consistent: businesses that are larger, better resourced, and operating in sectors with established commercial norms tend to pay more promptly. Smaller businesses, particularly in sectors where project billing or milestone-based payments are the norm, face the greatest risk of extended payment cycles.
What the Statistics Mean for UK Small Businesses
The aggregate statistics are useful for contextualising the late payment problem, but their real significance becomes apparent when translated into the practical experience of a UK SME. A business with thirty clients, each paying an average of eighteen days late on thirty-day terms, is carrying nearly three weeks of its monthly revenue as permanently delayed receivables. For a business turning over £500,000 per year, that is roughly £25,000 in cash that is consistently unavailable.
The Federation of Small Businesses has repeatedly highlighted late payment as one of the primary financial stressors for its members, and Atradius's research consistently shows that UK SMEs write off a higher proportion of their revenue as bad debt than their counterparts in many other European economies — a direct consequence of less robust receivables management at the SME level.
These figures are not presented to create alarm, but to illustrate that the late payment problem is not unusual or unique to any particular business — it is a structural feature of the UK commercial environment that every business extending credit to other businesses needs to actively manage.
Your Rights Under UK Late Payment Legislation
UK businesses have statutory rights that are relevant to these statistics and frequently go unexercised. Under the Late Payment of Commercial Debts (Interest) Act 1998, any business supplying goods or services to another UK business on credit terms has the automatic right to charge statutory interest at eight per cent above the Bank of England base rate from the date payment was due.
The Act also provides for fixed compensation per overdue invoice: £40 for invoices under £1,000, £70 for invoices between £1,000 and £9,999, and £100 for invoices of £10,000 and above. These amounts are claimable regardless of whether interest is charged, and they exist to compensate businesses for the administrative cost of chasing the debt.
Default payment terms in UK B2B transactions are thirty days, even where no terms are specified in the contract. Contractual terms beyond sixty days can be challenged as commercially unfair under the same legislation. Understanding these rights does not require legal representation to assert in the first instance — but enforcing them, if a customer declines to pay, may ultimately involve the civil courts.
Frequently Asked Questions
Q: What is the average payment time for UK businesses?
A: According to the Chartered Institute of Credit Management (CICM), the average UK business receives payment approximately eighteen days beyond its agreed payment terms. On standard thirty-day terms, this means the average invoice is settled at around forty-eight days from issue. This figure has remained relatively consistent over recent years, with some variation by sector and region.
Q: Which UK industry has the worst late payment record?
A: Construction consistently records among the highest Days Beyond Terms figures of any UK industry, reflecting the complexity of its billing structures, retention practices, and subcontracting chains. Hospitality and real estate have also historically featured in the worst-performing sectors, though this varies with economic conditions. Professional services and recruitment also tend to see extended payment cycles.
Q: Can I charge interest on an overdue invoice without going to court?
A: Yes. Under the Late Payment of Commercial Debts (Interest) Act 1998, the right to charge statutory interest arises automatically when a B2B invoice becomes overdue — you do not need a court order to assert it. You can include the interest calculation on a revised invoice or in formal correspondence. If the debtor refuses to pay the interest, enforcement would then require a court claim.
Q: Where can I find current UK late payment statistics?
A: The most authoritative regular sources of UK late payment data are the Chartered Institute of Credit Management (CICM), which publishes its Payment Practice Barometer; Atradius, which publishes an annual B2B Payment Practices Barometer covering the UK alongside other European markets; and Intrum, which publishes a European Payment Report that includes detailed UK data. All are freely available online and are updated annually or quarterly.
Q: Does the Prompt Payment Code apply to all UK businesses?
A: No. The Prompt Payment Code is a voluntary initiative administered by the Chartered Institute of Credit Management on behalf of the government. Signatories commit to paying invoices within thirty days of receipt and to a range of other prompt payment practices. Signing is voluntary, though it is mandatory for certain government suppliers. The Code is monitored and signatories who consistently breach it can be removed — but it is not a legal obligation.
Get in Touch
Late payment is a manageable risk, not an inevitable one. That credit control provides professional outsourced credit control for UK SMEs, helping businesses reduce their Days Beyond Terms, protect cash flow, and focus on growth. If you would like to talk through how a credit control service could support your business, get in touch.