Corporate law update: 21 - 27 March

This week:

• The Government sets out its next steps to tighten prompt invoice payment by large companies
• The Government is consulting on further details of its proposed regime for companies to redomicile into the UK
• Other items of interest

Changes announced to tighten prompt invoice payment by large companies

The Government has set out its intention to amend existing legislation to address the late payment of supplier invoices and to promote greater transparency of large organisations’ practices of paying invoices.

The statements follow the Government’s Plan for Small and Medium Sized Businesses, published in August 2025. That Plan was accompanied by a consultation that proposed various steps to tackle the late payment of invoices owed by larger organisations to small and medium-sized businesses.

You can read our previous Corporate Law Update for more about the Government’s original proposals to address late payment of supplier invoices.

Following that consultation, the Government has now confirmed it intends to take the following steps.

• Large companies will have a maximum period of 60 days to pay supplier invoices. There will be limited exceptions, including where both parties are large companies or the purchaser is a smaller company.
• There will be a statutory deadline for disputing an invoice.
• All commercial contracts will need to include an express right to statutory interest on any late payments at the rate of 8% above the Bank of England base rate. Parties will not be permitted to agree an alternative rate of interest.
• Large companies will be required to report on interest payments, including the value of interest to be paid and actually paid.
• Boards or audit committees of large companies will be required to explain any persistent late payment practices and the actions they are taking in response.
• The Small Business Commissioner will be given the power to investigate suspected poor payment practices or inaccurate reporting and to impose fines.
• The Government will consult on introducing a ban on the practice of deducting and withholding of retention payments under the terms of a construction contract. You can read our colleagues’ separate piece for more on what the Government’s proposals for late payments mean for construction contracts.

The Government will not proceed with its original proposal to reduce the frequency of reporting from twice per year to once annually.

The changes will need to be implemented by legislation in both the UK Parliament as well as the devolved legislatures of Scotland, Wales and Northern Ireland. The Government has said it intends to take legislation forward as Parliamentary time allows.

Read the Government’s next steps on tackling late payment of supplier invoices (opens PDF)

Government consults on regime for companies to redomicile in the UK

The Government is consulting for the second time on introducing a new regime to allow companies formed outside the UK to “redomicile” by changing their place of incorporation to the UK.

In the context of the proposals, “redomiciliation” describes a procedure by which a legal entity incorporated in one jurisdiction moves its place of incorporation or registration to a different jurisdiction. (This process is described in some countries as “migration” or “continuation”.)

The consultation follows the Government’s initial exploration of a potential new regime back in November 2021.

The Government has asked for feedback by 19 June 2026.

You can read our separate in-depth piece for more detail on the Government’s proposed corporate redomiciliation regime. In the meantime, the key aspects of the consultation are set out below.

• The Government is proposing to allow entities incorporated outside the UK to redomicile in the UK as a public company or a private company limited by shares.
• It is not proposing to allow UK entities to redomicile outside the UK, nor to switch between different legal jurisdictions within the UK (e.g. from Scotland to Northern Ireland).
• To redomicile in the UK, an entity would need to make a declaration of solvency and intend to carry on a business following redomiciliation. It would need to ensure its directors, controllers and shareholders are not subject to any asset freezes or director disqualifications.
• Once redomiciled, an entity would need to comply with UK law, including in relation to director identity verification, abolishing bearer shares, removing corporate directors, disclosing its beneficial owners and publishing accounts under UK law.
• However, an entity would not need to demonstrate any degree of economic substance, nor would it need to prove it is intending to redomicile “in good faith”.

The proposals would require primary legislation by Parliament. We await its next steps and will be carefully scrutinising the draft legislation when it appears.

Read the Government’s consultation on the design of a framework for corporate redomiciliations into the UK (opens PDF)

Read the Government’s analytical paper on a proposed UK corporate redomiciliation framework (opens PDF)

Other items

• The Insolvency Service is consulting on proposed reforms to corporate civil enforcement, including in relation to director disqualifications. Among other things, the consultation seeks views on measures to address companies that successively make late filings at Companies House by potentially requiring further board appointments or more paid-in capital. The consultation closes on 17 June 2026.
• Read the Insolvency Service’s consultation on corporate civil enforcement reforms (opens PDF)
• The Financial Reporting Council (FRC) has published the findings of the market study into the audit and corporate reporting challenges faced by small and medium-sized enterprises (SMEs) it launched in February 2025. The final report follows on from the FRC’s emerging trends report, published in July 2025. It identifies challenges in the SME audit market and suggests solutions.
• Read the FRC’s final report following its SME audit market study (opens PDF)
• The Government has published a draft of the Money Laundering and Terrorist Financing (Amendment) Regulations 2026. If made, the regulations would make various changes to the UK’s Trust Registration Service (TRS). The principal changes include expanding the regime to trusts that acquired registered land before 6 October 2020 and continue to hold it, and expanded access to information on all registered non-UK trusts.
• Access the draft Money Laundering and Terrorist Financing (Amendment) Regulations 2026

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