Analysis of invoices sent by FreeAgent’s small business customers between Setember 2024 and August 2025 has revealed that Southall and Blackburn are the most affected areas in the UK for SMEs who are struggling to be paid on time. Southall has seen a startling 77.9% of invoices sent during the past year paid late, while Blackburn has experienced a late payment rate of 73.6%.

However, the issue of late payments extends across the whole of the country, with the research revealing that the top ten places to have continuously received late payments over the past year are:

Postcodes with the most late payment

• Southall: 77.9%
• Blackburn: 73.6%
• Nottingham: 73.2%
• Belfast: 72.8%
• Harrow : 72%
• St Albans: 72%
• Telford: 69.7%
• Halifax: 69.5%
• Oldham: 69.4%
• Motherwell: 69.3%

Even in areas where the fewest invoices have been paid late, the figures are still alarming. Although Ipswich has once again emerged as the best area for timely payments, businesses in the IP postcode still experienced almost a third (31.5%) of their invoices being paid late in the last year. In fact, just three postcodes across the whole country experienced a late payment rate of below 50% – or just one out of every two invoices being paid on time.

Postcodes with the least late payments

• Ipswich: 31.5%
• Llandrindod: 41.7%
• Taunton: 48.9%
• Hereford: 52.1%
• Dumfries: 52.3%
• York: 54.1%
• Inverness: 54.5%
• Swindon: 54.7%
• Derby: 56.4%
• Lancaster: 56.5%

Nationally, Wales and Scotland have seen the least late payment over the past year (both 61.3%), closely followed by England (62.8%). However, Northern Ireland stands out as the worst nation in the UK for late payments, with a staggering 72.8% of invoices sent by small businesses paid late during the last 12 months.

The issue of late payment has also been highlighted by the government as an area of high priority, with a consultation currently underway to seek views into a range of proposed legislative measures aimed at tackling the problem. This consultation is due to continue until October 23rd 2025. 

Roan Lavery, Co-Founder and CEO, FreeAgent, commented: “Our figures highlight a serious and growing challenge for UK small businesses. When nearly two-thirds of invoices are being paid late, it’s not just inconvenient, it’s a fundamental threat to business survival and growth.

“Late payments hit hardest at the very businesses that are driving our economy, making it harder for them to plan, invest, and meet their own obligations. While there is a consultation currently underway which intends to address some of these issues, it’s vital that we see action from both policymakers and the business community to create a culture of prompt payment and to support SMEs in embracing digital tools that can protect their cash flow.”

Emma Jones, the UK’s Small Business Commissioner, added: "These figures paint a bleak picture. We know that on average 38 businesses close everyday as a result of late payment – this isn't just an inconvenience. I am working to address the issue of late payment through encouraging digital adoption due to the link between using software and getting paid on time, active promotion of the Fair Payment Code that showcases companies with good payment performance, and direct contact with companies against whom cases of late payment are being raised.

“Late payment is a complex issue, exacerbated by a challenging economic environment, and we are working on all the elements to try and get money moving faster to small firms.”

The true impact

A separate survey by FreeAgent reveals the consequences of late and non-payment for small businesses. Over a third (34.9%) of small businesses are left in limbo, waiting up to three months for outstanding invoices to be paid. Due to this late payment epidemic, almost half (43.1%) of small business owners report having to write off money due to late or non-payment of invoices. For some, the losses are significant with more than one in ten (10.3%) having had to write off between £1,001 and £5,000.

Due to this there is a strong appetite for tougher payment policies among SMEs with nearly half (49%) of those surveyed believing the Fair Payment Code should be made mandatory for all businesses.

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