For small hauliers, late payment is not a paperwork problem. Operators have to cover wages, fuel, vehicle finance, insurance, maintenance and tyres regardless of whether a customer has settled an invoice. When payment is delayed, the financial pressure is pushed down the supply chain to the firms least able to absorb it.
The RHA welcomed the Bill, describing it as a “meaningful step forwards”. Richard Smith, the association’s Managing Director, said late payment “kills viable firms and drags on the whole supply chain”.
Smith said margins remained low across road transport, while rising costs were still a daily pressure for operators. The RHA added that 400 firms across the road transport industry went bust last year, with further insolvencies already being seen this year.
Under the Bill, large firms would have to pay smaller suppliers within a maximum of 60 days. Commercial contracts would also have to include statutory interest on overdue invoices, set at 8% above the Bank of England base rate.
The Government says the aim is to stop larger firms using delayed payment as a source of working capital at the expense of smaller suppliers. According to the Department for Business and Trade, late payments cost the UK economy around £11 billion a year and are linked to the closure of 38 businesses every day.
The Bill would also strengthen the Small Business Commissioner’s role. The Commissioner would be able to investigate suspected poor payment practices, adjudicate payment disputes outside court and impose financial penalties on persistent late payers. The Government says penalties could reach “tens of millions” of pounds in the most serious cases.
Prime Minister Keir Starmer said too many small business owners were spending hours chasing money they were already owed.
“When payments don’t come through, the cost is personal. It’s about whether you can pay your staff, keep the lights on, or invest in your future,” Starmer said.
For hauliers, the proposed 60-day cap could be particularly relevant where smaller operators work as subcontractors for larger logistics companies, retailers, manufacturers or other major customers. In those chains, delayed payment can leave the transport operator carrying the cost of keeping vehicles and drivers on the road while waiting for money already earned.
The Federation of Small Businesses has also backed the reforms. Tina McKenzie, the FSB’s Policy Chair, said tackling late payment was “one of the biggest things the government can do to help small businesses grow”, adding that board-level responsibility for payment practices would be an important part of changing payment culture.
The Bill will now go through the parliamentary process. The RHA said the reforms could improve financial resilience in road transport, but stressed that implementation and enforcement would be key.
Smith said that, if implemented and enforced effectively, the plans “could go some way to improving financial resilience”.
Spain’s example: fines, public lists and shorter payment times
Spain has already gone further than the UK proposals by creating a transport-specific sanctions regime for late payment in road haulage. Since 2021, companies that pay road freight operators after the legal maximum term of 60 days can be fined by the transport authorities. The Spanish system treats late payment not only as a private commercial dispute, but as an administrative transport offence.
The fines are scaled according to the value of the transport service. Lower-value cases can trigger penalties of several hundred euros, while repeated or more serious infringements can rise to €30,000. Spain also publishes the names of companies that have received final sanctions, creating a public “name-and-shame” effect alongside the financial penalty.
The policy appears to have had an effect. According to Fenadismer’s late-payment observatory, the average payment term in Spanish road transport has fallen from 83 days in 2021 to 54 days in February 2026. However, the problem has not disappeared: Fenadismer says 43% of customers were still exceeding the legal payment deadline in February, mostly with delays of between 60 and 90 days.
