UK firms paid GBP £138 million late as e-invoicing looms

UK businesses paid £138 million in invoices beyond agreed terms in 2026, according to Tungsten Automation, whose analysis found every company surveyed had missed payment terms on at least some invoices.

The figures come as the UK moves towards mandatory e-invoicing for VAT invoices from April 2029.

The analysis was based on publicly available government payment-practices disclosures filed between January and October 2026. The average value of invoices paid late was £4.9 million per company surveyed.

Across the companies analysed, an average of 17% of invoices were paid beyond agreed terms. Of those late payments, 36% were settled between 31 and 60 days late, while 15% took 61 days or longer.

Just 3% of invoices went unpaid because of disputes, the analysis found, suggesting most delays were unrelated to formal disagreements over payment.

The research also pointed to limited uptake of e-invoicing. Just 18% of the companies surveyed offered e-invoicing solutions, leaving 82% without them ahead of the planned rule change.

Mandate pressure

The UK government roadmap says all VAT invoices must be issued as e-invoices from 1 April 2029. Meanwhile, the Commercial Payments Bill would require large businesses to pay smaller suppliers within 60 days and apply interest on late payments at 8% above the Bank of England base rate.

Those measures are intended to address persistent late payment across supply chains, an issue that has long weighed on smaller suppliers with less room to absorb cashflow delays. Tungsten's analysis suggests many businesses still have work to do before the invoicing changes take effect.

The methodology covered payment-practice reports with reporting end dates between the start of January and mid-October 2026. It recorded only explicitly disclosed figures and treated missing data as unavailable rather than as evidence of weak payment performance.

Operational gaps

The figures also suggest payment delays extend far beyond isolated cases. With every company in the sample missing agreed terms on at least some invoices, late settlement appears to be a broad feature of current payment processes rather than an exception.

The data also suggests many causes sit within finance operations, where invoices can still move through manual processing and fragmented approval chains. Those internal processes are coming under greater scrutiny as regulators focus more closely on invoice handling and payment timing.

"Late payment hits suppliers first, then it spreads. When cash is stuck in someone else's process, a business cannot plan or invest with any confidence, and that adds up across the whole economy. Some delays have other causes. Plenty start with systems that don't talk to each other and approval chains that seem to wander through half the building. E-invoicing mandates are on the way, and the late payment charges that come with them will sting, so the companies that start now will be glad they did. Tools that fix this already exist. The sooner they are in place, the less anyone has to chase," said Kate Bohn, Finance Industry Consultant at Tungsten Automation.