In this episode, Emma Reilly breaks down the fast-shifting UK construction landscape. From credit insurers tightening risk limits to upcoming parliamentary legislation aimed at cracking down on late payments, learn how construction businesses can turn market challenges into opportunities for profitable growth and cash flow protection.

Key Takeaways & Episode Highlights

1. Market Update: Credit Insurers Tightening Belts

• Reduced Coverage: Trade credit surveys across the building materials sector show insurers are growing increasingly cautious, leading to slashed or pulled credit limits on key accounts.

• Higher Costs & Stricter Terms: Insurers are hiking premiums, tightening renewal terms, and often delaying risk profile updates, leaving suppliers hesitating to trade.

• Proactive Risk Management: Rather than letting aged invoices sit, businesses must turn overdue debt into active working capital to fuel future deals.

2. Commercial Payments Bill (Late Payments Bill) Updates

Parliament is progressing new legislation targeting the £11 billion lost annually by UK businesses due to delayed invoices:

• 60-Day Hard Cap: B2B contract payment windows will be capped at a maximum of 60 days (30 days for public authorities); extended terms will be legally void.

• Mandatory Late Interest: Overdue accounts will automatically accrue simple interest at 8% above the Bank of England base rate, with no option to contractually opt out.

• Ban on Retentions: Construction retentions are set to be banned following a two-year transition period.

• Enforcement Powers: The Small Business Commissioner will gain statutory powers to investigate persistent late payers and issue fines of up to 1% of annual UK turnover.

• • Corporate Transparency: Large firms must publish board-level or audit-committee-level commentaries detailing poor payment performance and remedial plans.

  Action Steps for Construction Suppliers

• • Recover Debt Early: Use firm, professional debt recovery teams to collect unpaid accounts without damaging crucial trading relationships.

• • Leverage Data: Don't rely solely on insurer limits—use real-time, sector-tailored credit intelligence to set self-insured limits safely and close more sales.

  
  

  Connect & Resources

• • LinkedIn: Search for Emma Reilly Top Service to share feedback, suggest episode topics, or discuss credit management strategies.

  • Website: https://www.top-service.co.uk/contact-us/ Contact the Top Service team to optimise your credit risk management and debt recovery process.