Current position
The Commercial Payments Bill [HL] is still before Parliament. It has completed Lords report stage; third reading is scheduled for 20 October 2026. The final text can still change before Royal Assent.
What the Bill would do
- Ban cash retentions in construction contracts through amendments to Part II of the Construction Act.
- Change rules on payment terms in commercial contracts, including limits aimed at long payment periods.
- Strengthen statutory late-payment protections, including interest provisions.
- Expand the Small Business Commissioner’s role in relation to payment disputes and poor payment practices.
What to do now
- Chase existing retentions under current contracts. The Bill does not presently release sums already held.
- Read contracts being signed now. Check retention clauses, payment dates and any proposed substitutes for cash retention.
- Keep payment notices tight. Construction Act adjudication remains central to current payment disputes.
- Watch upstream insolvency risk. Until any ban is in force, retention money can remain exposed if the holding party fails.
This article reflects the Bill’s status on 28 September 2026 and should be checked again before relying on it after that date.
Verifiable sources
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This article is general information, not legal advice on a particular contract or dispute.
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