The new debt collection laws in the UK that took effect in 2026 change how a business recovers a debt, and one major Bill is still on its way. The biggest change already in force is longer notice before enforcement agents can take control of a debtor’s goods. The biggest change still to come is a mandatory right to late payment interest.
This page sets out the new debt collection laws in the UK that matter to business creditors, what has not changed, and what to do differently. It carries a change log so you can see when it was last updated. Last updated: 08/10/2026.
What Are the New Debt Collection Laws in the UK?
Since 1 May 2026, enforcement agents must give 14 clear days’ notice before taking control of goods, up from seven.
Statutory enforcement fees rose by 5% from the same date, and the thresholds for percentage-based fees have been raised.
The Commercial Payments Bill, introduced on 19 May 2026, would make late payment interest mandatory. It is not yet law.
Taking Control of Goods: Longer Notice and Higher Fees
The Taking Control of Goods (Miscellaneous Amendments) Regulations 2026 were made on 24 March 2026 and came into force on 1 May 2026. They amend the rules that govern how enforcement agents, including High Court Enforcement Officers, take and sell a debtor’s goods to pay a judgment debt.
The notice period is the headline change. An enforcement agent must now give 14 clear days’ notice of enforcement before taking control of goods. It was seven. Where a debtor is working with a debt adviser, the adviser can ask for the period to be extended to a minimum of 28 days. Commentary says this applies to the personal debts covered by the Breathing Space rules, not to company debts. The notice of enforcement must also point to free debt advice and explain the possible extension.
The other changes are:
An enforcement agent cannot automatically move to the second enforcement stage after an unsuccessful first visit.
Fixed enforcement fees have been revised, with a 5% increase reported at each stage.
A new prescribed notice of enforcement form reflects the longer periods.
The changes apply to enforcement instructed on or after 1 May 2026. Writs lodged before that date continue under the old rules until enforcement ends.
What it means for a creditor
Build the extra week into your timetable. A judgment enforced by writ of control now takes longer to reach the visit stage, and more debtors will use the time to pay or agree terms. A county court warrant of control can recover up to £5,000. For a larger judgment, or one of at least £600 that is not regulated consumer credit, you can transfer it to the High Court for enforcement using form N293A. Enforcement is carried out by court officers and High Court Enforcement Officers, not by MAR Legal.
The Commercial Payments Bill: Not Yet Law
The Commercial Payments Bill was introduced in the House of Lords on 19 May 2026. It is also described as the Small Business Protections (Late Payments) Bill. It would amend the Late Payment of Commercial Debts (Interest) Act 1998, and it proposes the following.
Mandatory statutory interest at 8% above the Bank of England base rate, with any contract term that excludes or lowers it void.
A maximum payment term of 60 days in contracts within scope, with limited exemptions.
A ban on retentions in construction contracts.
A fixed sum for suppliers where a customer raises an invoice dispute late or without enough information.
More powers for the Small Business Commissioner, including financial penalties for persistent late payers.
The Bill is still before Parliament. Law firm commentary expects Royal Assent in 2027, with much of the detail to follow in regulations. Until then, a substantial contractual remedy for late payment can still displace statutory interest. Some guides online describe the new rules as already in force. They are not.
Is Your Credit Control Up to Date?
Longer enforcement notice and a Bill on late payment interest both affect how you recover a business debt. MAR Legal can review your terms and process against the changes. Contact us for a no obligation consultation.
What Has Not Changed
Statutory demands: GOV.UK gives the thresholds as £750 for a company and £5,000 for an individual, with 21 days to respond and four months to apply for a winding-up or bankruptcy order.
Late payment interest: 8% above the reference rate, plus a fixed sum of £40, £70 or £100, charged once for each late payment.
Pre-action steps: the Pre-Action Protocol for Debt Claims, with 30 days to respond, for individuals and sole traders, and the Practice Direction on Pre-Action Conduct and Protocols for companies.
Time limits: six years for most simple contract debts under the Limitation Act 1980.
Temporary pandemic measures once raised the winding-up threshold to £10,000. Those measures have ended, and GOV.UK gives £750.
Breathing Space and Personal Guarantees
Breathing Space, the Debt Respite Scheme, gives an individual a pause on creditor action while they get debt advice. GOV.UK says you cannot enforce a judgment while a debtor has Breathing Space. It applies to individuals, so it can affect sole traders and personal guarantors, even where the main debtor is a company. A company cannot use it. If you are told that a debtor has entered Breathing Space, stop enforcement and take advice before you do anything else on that debt.
Data Protection When You Use an Agency
UK GDPR and the Data Protection Act 2018 apply to debt recovery, including when you instruct a collection or tracing agency. You will usually remain the controller of the debtor’s personal data. You need a lawful basis for sharing it, a written agreement with the agency and a privacy notice that describes the sharing.
What to Do Differently Now
Add 14 clear days to your enforcement timetable and expect some debtors to ask for 28.
Check any guide or template dated before May 2026 against the new notice period.
Make sure your terms of business set a late payment rate and preserve your statutory right to interest as an alternative.
Claim statutory interest and the fixed sum routinely on overdue business invoices.
Set up a routine to spot Breathing Space notices and stop enforcement when one arrives.
Review the position again when the Commercial Payments Bill moves.
Change Log
08/10/2026: first published. Covers the Taking Control of Goods (Miscellaneous Amendments) Regulations 2026 and the Commercial Payments Bill as introduced.
Next review: when the status of the Commercial Payments Bill changes.
How MAR Legal Can Help
Our Manchester team advises businesses across the UK on recovering unpaid debts. Our solicitors can review your terms of business and credit control process against these changes, calculate interest and compensation, prepare a letter before action and advise on a statutory demand or the settlement of a business debt. This is pre-litigation advice only. We act for businesses recovering business-to-business debts. We do not act for private individuals who owe money. Where a matter involves reserved legal activities, including court proceedings and enforcement, we work alongside appropriately regulated professionals. See our debt recovery lawyers in Manchester page for the full service. Contact us for a no obligation consultation.
Final Thought
Most of what has changed in 2026 affects the enforcement end of debt recovery, so the earlier steps matter more than ever. Chase early, claim your interest, send a proper letter before action and plan for a longer road if the debtor ignores you.