Late payment in construction is becoming harder to defend.

Contractors who still treat payment terms as paperwork are missing the commercial point.

The Commercial Payments Bill is moving through Parliament, with proposals aimed directly at one of construction’s oldest problems: businesses doing the work, then waiting too long for their money.

The Bill proposes tighter maximum payment periods, stronger rights around late-payment interest, wider powers for the Small Business Commissioner and measures aimed at ending retentions in construction.

This is not a minor administrative change.

Payment is not a favour.

Construction businesses are not banks.

And withholding money should not become a routine method of managing somebody else’s cashflow.

The numbers explain why this matters.

Construction recorded 3,866 company insolvencies in England and Wales in the 12 months to August 2026. Construction accounted for 17% of insolvencies where industry was captured, more than any other sector.

The figure was 2% lower than the preceding 12 months.

3,866 construction insolvencies is still a serious commercial warning.

For developers, main contractors, subcontractors and commercial directors, the lesson is straightforward.

Do not wait for legislation to force better payment discipline.

Start with the contract already on your desk.

Check the payment mechanism before signing.

Know when applications become due and record variations properly.

Check every Pay Less Notice against the contractual and statutory requirements.

Keep evidence supporting the value claimed and when payment stops, establish your legal position early rather than spending six weeks sending increasingly frustrated emails.

I still see one habit across the industry which deserves challenging.

“Preserving the relationship” becomes the excuse for delaying formal action.

Allowing a payment problem to become a cashflow problem does not preserve a commercial relationship. It shifts the commercial balance.

Adjudication exists partly because construction projects do not operate sensibly when significant sums remain unresolved for months.

Under the usual statutory timetable, an adjudicator reaches a decision within 28 days of referral, subject to the applicable rules and any agreed extension.

Speed matters.

But speed only helps when the paperwork, notices and evidence are already in order.

A contractor who starts preparing after the dispute has escalated has already surrendered valuable ground.

The Commercial Payments Bill is scheduled for its third reading in the House of Lords on 20 October 2026. The proposals are still progressing through Parliament and are not settled law.

Whatever the final wording, the direction matters.

The industry is being pushed towards tighter payment discipline.

Where payment has properly fallen due under the contract, months of chasing should not be part of the process and where substantial money is owed, repeatedly asking for payment is not a strategy.

Know your contractual position.

Protect your evidence.

Watch your deadlines.

Then act before somebody else’s payment tactics become your cashflow crisis.

The industry has tolerated late payment for far too long.

If you believe retention and extended payment terms still represent legitimate commercial protection, defend the position.

Because “this is how construction works” is no longer a good enough answer.