Industry welcomes long awaited Government support SMEs - Revision history

Designing Buildings at 05:57, 5 August 2025

2025-08-05T05:57:21Z

← Older revision		Revision as of 05:57, 5 August 2025
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	The government has also committed to permanently lowering business rates multipliers for the retail, hospitality, and leisure sectors, which have been particularly hard hit in recent years. Through a combination of legislative reform, financial support, and strategic initiatives, this plan marks a comprehensive and ambitious effort to level the playing field for small businesses and unlock their full potential as drivers of economic growth.		The government has also committed to permanently lowering business rates multipliers for the retail, hospitality, and leisure sectors, which have been particularly hard hit in recent years. Through a combination of legislative reform, financial support, and strategic initiatives, this plan marks a comprehensive and ambitious effort to level the playing field for small businesses and unlock their full potential as drivers of economic growth.
		+
		+	= Comments =
		+
		+	Prime Minister Keir Starmer said: “From builders and electricians to freelance designers and manufacturers—too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses. It’s unfair, it’s exhausting, and it’s holding Britain back. So, our message is clear: it’s time to pay up. Through our Small Business Plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive, driving growth across the country through our Plan for Change.”
		+
		+	Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, said: “Making sure businesses are paid on time, that our high streets thrive, and creating conditions in which everyone can start and succeed in business are crucial priorities for small businesses, communities and the economy. It’s very welcome that the Prime Minister has today made them his Government’s priorities. I’m pleased that FSB and the Government have been able to work in lockstep on the bold and ambitious measures needed to tackle the scourge of late payment through legislation, and other pro-growth, pro-small business measures. Today’s plan is an encouraging commitment from the Government to take the side of small businesses in the great growth challenge ahead.”
		+
		+	Rob Driscoll, ECA Director of Legal & Business, commented on behalf of Actuate UK’s Business Group: “Finally, Government is consulting on how best to reconcile unfair and delayed payment practices. In recognition of the need to ‘go further, faster’, Government’s engagement on how to reform retentions marks a seminal once-in-a-generation moment for the industry to come together and shape reform in an area which has stifled growth, innovation and training, crippling supply-chain cash-flow and amplifying the repercussions of insolvency for over a century. Let’s hope industry can come together, give clients the comfort they need and suppliers the protect they need, in order to make our industry more resilient to deliver the UK’s built environment.”

	= Electrical contractors' perspective =		= Electrical contractors' perspective =
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	The Government’s consultation is part of an economy-wide policy commitment to tackle late payments, support small businesses to thrive, and grow a skilled, competent workforce to deliver housing and infrastructure projects which meet net zero targets. Ninety-nine percent of construction companies are SMEs and poor cash flow is a major concern; construction still holds the unfortunate ‘first’ as the sector of the UK’s economy with more reported insolvencies than any other area of commerce.		The Government’s consultation is part of an economy-wide policy commitment to tackle late payments, support small businesses to thrive, and grow a skilled, competent workforce to deliver housing and infrastructure projects which meet net zero targets. Ninety-nine percent of construction companies are SMEs and poor cash flow is a major concern; construction still holds the unfortunate ‘first’ as the sector of the UK’s economy with more reported insolvencies than any other area of commerce.
−
−	~~= Impacts on mental health =~~
−
−	~~= Comments =~~
−
−	~~Prime Minister Keir Starmer said:~~
−
−	“From builders and electricians to freelance designers and manufacturers—too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses. It’s unfair, it’s exhausting, and it’s holding Britain back. So, our message is clear: it’s time to pay up. Through our Small Business Plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive, driving growth across the country through our Plan for Change.”
−
−	~~Business and Trade Secretary Jonathan Reynolds said:~~
−
−	“This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best - growing our local economies. Our Small Business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs the financial backing they need. This is our Plan for Change in action, putting more money in people’s pockets, boosting local communities and ensuring Britain is a great place to do business and thrive.”
−
−	~~Small Business Minister Gareth Thomas said:~~
−
−	“I want the UK to be the best place in the world to start a business, grow and succeed - and that’s why we’ve taken bold steps today. Too many small firms go under each year because they aren’t paid on time - that is completely unacceptable. I hear all too often about businesses who just don’t have the cash needed to start up or grow. Today, we’ve announced measures as part of our Plan for Change to tackle all of those issues and beyond. This is the government listening to businesses, working with them, and delivering real change.”
−
−	~~Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, said:~~
−
−	“Making sure businesses are paid on time, that our high streets thrive, and creating conditions in which everyone can start and succeed in business are crucial priorities for small businesses, communities and the economy. It’s very welcome that the Prime Minister has today made them his Government’s priorities. I’m pleased that FSB and the Government have been able to work in lockstep on the bold and ambitious measures needed to tackle the scourge of late payment through legislation, and other pro-growth, pro-small business measures. Today’s plan is an encouraging commitment from the Government to take the side of small businesses in the great growth challenge ahead.”
−
−	~~Rob Driscoll, ECA Director of Legal & Business, commented on behalf of Actuate UK’s Business Group:~~
−
−	“Finally, Government is consulting on how best to reconcile unfair and delayed payment practices. In recognition of the need to ‘go further, faster’, Government’s engagement on how to reform retentions marks a seminal once-in-a-generation moment for the industry to come together and shape reform in an area which has stifled growth, innovation and training, crippling supply-chain cash-flow and amplifying the repercussions of insolvency for over a century. Let’s hope industry can come together, give clients the comfort they need and suppliers the protect they need, in order to make our industry more resilient to deliver the UK’s built environment.”

	= Related articles on Designing Buildings =		= Related articles on Designing Buildings =

	* 37% of SMEs suffer mental health problems due to pay issues.		* 37% of SMEs suffer mental health problems due to pay issues.
−	* 600 million investment for 60,000 more skilled construction workers announced. mention quote.
	* Amendment to Reporting on Payment Practices and Performance Regulations approved.		* Amendment to Reporting on Payment Practices and Performance Regulations approved.
−	* Building trust with customers, and trusting tradesmen.
−	* Can your business afford to ignore mental well-being?
	* Cash flow.		* Cash flow.
−	* Construction Skills Mission Board launch construction sector skills mission
	* Crackdown on late payments in major support package for small businesses.		* Crackdown on late payments in major support package for small businesses.
−	* ECA articles.
−	* ECA welcomes reports on skills gap and investment returns on apprenticeships
	* Industry reacts to first labour government King's speech in fifteen years.		* Industry reacts to first labour government King's speech in fifteen years.
	* It takes a community to support mental health and wellbeing.		* It takes a community to support mental health and wellbeing.
Line 74:		Line 52:
	* Prompt Payment Code: the story behind the headlines		* Prompt Payment Code: the story behind the headlines
	* Prompt Payment Code boosted to help SMEs.		* Prompt Payment Code boosted to help SMEs.
−	* Small and medium-sized enterprises SME.	+	* The causes of late payment in construction.
−	* SMEs and government contracts.	+
−	* Spring Statement 2025. mention quote.	+
−	* The causes of late payment in construction,	+
−	* Welsh Skills Body (Medr) launches ambitious plan	+

	[[Category:DCN_Commentary]] [[Category:DCN_Event]] [[Category:DCN_News]] [[Category:DCN_Organisation]] [[Category:DCN_Standard]] [[Category:News]] [[Category:Organisations]] [[Category:Taxation]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]		[[Category:DCN_Commentary]] [[Category:DCN_Event]] [[Category:DCN_News]] [[Category:DCN_Organisation]] [[Category:DCN_Standard]] [[Category:News]] [[Category:Organisations]] [[Category:Taxation]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]

Editor at 15:30, 31 July 2025

2025-07-31T15:30:03Z

← Older revision		Revision as of 15:30, 31 July 2025
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	= Background =		= Background =

−	~~The~~ UK government ~~has~~ announced the most significant reforms in 25 years to combat late payments, an issue that costs the economy £11 billion annually and forces 38 businesses to shut down each day. These measures are part of a broader strategy to back small businesses and fuel economic growth under the “Plan for Change.” Central to this initiative is a new set of laws that will give the UK the toughest stance on late payments amongst G7 countries.	+	[https://www.gov.uk/government/news/time-to-pay-up-toughest-crackdown-on-late-payments-in-a-generation-unveiled-in-plan-to-back-small-businesses On 30 July, 2025 the UK government announced] the most significant reforms in 25 years to combat late payments, an issue that costs the economy £11 billion annually and forces 38 businesses to shut down each day. These measures are part of a broader strategy to back small businesses and fuel economic growth under the “Plan for Change.” Central to this initiative is a new set of laws that will give the UK the toughest stance on late payments amongst G7 countries.

	Small and medium-sized enterprises (SMEs) form the backbone of the UK economy, employing 60% of the workforce and generating £2.8 trillion in turnover. However, these firms often struggle with systemic challenges, particularly late payments and difficulty accessing finance. These issues hinder growth and investment opportunities for small businesses, many of which operate on tight margins.		Small and medium-sized enterprises (SMEs) form the backbone of the UK economy, employing 60% of the workforce and generating £2.8 trillion in turnover. However, these firms often struggle with systemic challenges, particularly late payments and difficulty accessing finance. These issues hinder growth and investment opportunities for small businesses, many of which operate on tight margins.
Line 23:		Line 23:
	= Electrical contractors' perspective =		= Electrical contractors' perspective =

−	The Electrical Contractors’ Association responded to the plan saying for decades it has been at the forefront of advising Government and the Construction Leadership Council, on how best to reconcile late and unfair payment practices. It has has helped design, shape and improve payment codes and charters, payment reporting regulations, 30-day payment under the Procurement Act, the Construction Act and requirements that suppliers must pay fairly in order to win more public work.	+	[https://www.eca.co.uk/news/2025/jul/eca-welcomes-government-consultation-on-retentions-and-late-payments The Electrical Contractors’ Association responded to the government plan saying] for decades it has been at the forefront of advising Government and the Construction Leadership Council, on how best to reconcile late and unfair payment practices. It has has helped design, shape and improve payment codes and charters, payment reporting regulations, 30-day payment under the Procurement Act, the Construction Act and requirements that suppliers must pay fairly in order to win more public work.

	ECA welcomed the new Government consultation on taking measures against late payments and reforming cash retentions as part of the new Small Business Strategy launched today. The consultation predominantly picks up ideas and strategies ECA has fed into Government over a number of years and goes further than any previous governments have, to date, gone.		ECA welcomed the new Government consultation on taking measures against late payments and reforming cash retentions as part of the new Small Business Strategy launched today. The consultation predominantly picks up ideas and strategies ECA has fed into Government over a number of years and goes further than any previous governments have, to date, gone.
Line 30:		Line 30:

	The Government’s consultation is part of an economy-wide policy commitment to tackle late payments, support small businesses to thrive, and grow a skilled, competent workforce to deliver housing and infrastructure projects which meet net zero targets. Ninety-nine percent of construction companies are SMEs and poor cash flow is a major concern; construction still holds the unfortunate ‘first’ as the sector of the UK’s economy with more reported insolvencies than any other area of commerce.		The Government’s consultation is part of an economy-wide policy commitment to tackle late payments, support small businesses to thrive, and grow a skilled, competent workforce to deliver housing and infrastructure projects which meet net zero targets. Ninety-nine percent of construction companies are SMEs and poor cash flow is a major concern; construction still holds the unfortunate ‘first’ as the sector of the UK’s economy with more reported insolvencies than any other area of commerce.
		+
		+	= Impacts on mental health =

	= Comments =		= Comments =

Editor at 15:27, 31 July 2025

2025-07-31T15:27:39Z

← Older revision		Revision as of 15:27, 31 July 2025
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	“Finally, Government is consulting on how best to reconcile unfair and delayed payment practices. In recognition of the need to ‘go further, faster’, Government’s engagement on how to reform retentions marks a seminal once-in-a-generation moment for the industry to come together and shape reform in an area which has stifled growth, innovation and training, crippling supply-chain cash-flow and amplifying the repercussions of insolvency for over a century. Let’s hope industry can come together, give clients the comfort they need and suppliers the protect they need, in order to make our industry more resilient to deliver the UK’s built environment.”		“Finally, Government is consulting on how best to reconcile unfair and delayed payment practices. In recognition of the need to ‘go further, faster’, Government’s engagement on how to reform retentions marks a seminal once-in-a-generation moment for the industry to come together and shape reform in an area which has stifled growth, innovation and training, crippling supply-chain cash-flow and amplifying the repercussions of insolvency for over a century. Let’s hope industry can come together, give clients the comfort they need and suppliers the protect they need, in order to make our industry more resilient to deliver the UK’s built environment.”

−	[[Category:~~Articles_needing_more_work~~]]	+	= Related articles on Designing Buildings =
		+
		+	* 37% of SMEs suffer mental health problems due to pay issues.
		+	* 600 million investment for 60,000 more skilled construction workers announced. mention quote.
		+	* Amendment to Reporting on Payment Practices and Performance Regulations approved.
		+	* Building trust with customers, and trusting tradesmen.
		+	* Can your business afford to ignore mental well-being?
		+	* Cash flow.
		+	* Construction Skills Mission Board launch construction sector skills mission
		+	* Crackdown on late payments in major support package for small businesses.
		+	* ECA articles.
		+	* ECA welcomes reports on skills gap and investment returns on apprenticeships
		+	* Industry reacts to first labour government King's speech in fifteen years.
		+	* It takes a community to support mental health and wellbeing.
		+	* PPN 021: Payment Spot Checks in Public Sub-Contracts.
		+	* Prompt payment.
		+	* Prompt payment code.
		+	* Prompt Payment Code: the story behind the headlines
		+	* Prompt Payment Code boosted to help SMEs.
		+	* Small and medium-sized enterprises SME.
		+	* SMEs and government contracts.
		+	* Spring Statement 2025. mention quote.
		+	* The causes of late payment in construction,
		+	* Welsh Skills Body (Medr) launches ambitious plan
		+
		+	[[Category:DCN_Commentary]] [[Category:DCN_Event]] [[Category:DCN_News]] [[Category:DCN_Organisation]] [[Category:DCN_Standard]] [[Category:News]] [[Category:Organisations]] [[Category:Taxation]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]

Editor at 14:42, 31 July 2025

2025-07-31T14:42:25Z

← Older revision		Revision as of 14:42, 31 July 2025
Line 7:		Line 7:
	Small and medium-sized enterprises (SMEs) form the backbone of the UK economy, employing 60% of the workforce and generating £2.8 trillion in turnover. However, these firms often struggle with systemic challenges, particularly late payments and difficulty accessing finance. These issues hinder growth and investment opportunities for small businesses, many of which operate on tight margins.		Small and medium-sized enterprises (SMEs) form the backbone of the UK economy, employing 60% of the workforce and generating £2.8 trillion in turnover. However, these firms often struggle with systemic challenges, particularly late payments and difficulty accessing finance. These issues hinder growth and investment opportunities for small businesses, many of which operate on tight margins.

−	= ~~Planned initiatives~~ =	+	= The government plan =

	To tackle late payments, the government will empower the Small Business Commissioner with new enforcement capabilities. This includes the authority to impose substantial fines on large firms that consistently pay suppliers late. Additionally, the Commissioner will be able to perform spot checks and enforce a 30-day invoice verification period to speed up dispute resolution. New legislation will also mandate a maximum payment term of 60 days, with plans to reduce it further to 45 days. Audit committees will be legally required to scrutinise payment practices at the board level, and mandatory interest charges will be imposed on late payments, ensuring larger companies treat small suppliers fairly.		To tackle late payments, the government will empower the Small Business Commissioner with new enforcement capabilities. This includes the authority to impose substantial fines on large firms that consistently pay suppliers late. Additionally, the Commissioner will be able to perform spot checks and enforce a 30-day invoice verification period to speed up dispute resolution. New legislation will also mandate a maximum payment term of 60 days, with plans to reduce it further to 45 days. Audit committees will be legally required to scrutinise payment practices at the board level, and mandatory interest charges will be imposed on late payments, ensuring larger companies treat small suppliers fairly.
Line 21:		Line 21:
	The government has also committed to permanently lowering business rates multipliers for the retail, hospitality, and leisure sectors, which have been particularly hard hit in recent years. Through a combination of legislative reform, financial support, and strategic initiatives, this plan marks a comprehensive and ambitious effort to level the playing field for small businesses and unlock their full potential as drivers of economic growth.		The government has also committed to permanently lowering business rates multipliers for the retail, hospitality, and leisure sectors, which have been particularly hard hit in recent years. Through a combination of legislative reform, financial support, and strategic initiatives, this plan marks a comprehensive and ambitious effort to level the playing field for small businesses and unlock their full potential as drivers of economic growth.

−	Electrical ~~Contractors association~~	+	= Electrical contractors' perspective =
		+
		+	The Electrical Contractors’ Association responded to the plan saying for decades it has been at the forefront of advising Government and the Construction Leadership Council, on how best to reconcile late and unfair payment practices. It has has helped design, shape and improve payment codes and charters, payment reporting regulations, 30-day payment under the Procurement Act, the Construction Act and requirements that suppliers must pay fairly in order to win more public work.
		+
		+	ECA welcomed the new Government consultation on taking measures against late payments and reforming cash retentions as part of the new Small Business Strategy launched today. The consultation predominantly picks up ideas and strategies ECA has fed into Government over a number of years and goes further than any previous governments have, to date, gone.
		+
		+	The construction industry relies on excessively delayed payment periods, which disproportionally impacts the cash-flow of small and medium sized businesses (SMEs), in particular those within the supply chain such as electrical contractors. ECA has been working to end the unfair practice of retentions for many years. ECA will respond to Government by recommending a solution that is fair, enforceable and sustainable.
		+
		+	The Government’s consultation is part of an economy-wide policy commitment to tackle late payments, support small businesses to thrive, and grow a skilled, competent workforce to deliver housing and infrastructure projects which meet net zero targets. Ninety-nine percent of construction companies are SMEs and poor cash flow is a major concern; construction still holds the unfortunate ‘first’ as the sector of the UK’s economy with more reported insolvencies than any other area of commerce.
		+
		+	= Comments =
		+
		+	Prime Minister Keir Starmer said:
		+
		+	“From builders and electricians to freelance designers and manufacturers—too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses. It’s unfair, it’s exhausting, and it’s holding Britain back. So, our message is clear: it’s time to pay up. Through our Small Business Plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive, driving growth across the country through our Plan for Change.”
		+
		+	Business and Trade Secretary Jonathan Reynolds said:
		+
		+	“This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best - growing our local economies. Our Small Business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs the financial backing they need. This is our Plan for Change in action, putting more money in people’s pockets, boosting local communities and ensuring Britain is a great place to do business and thrive.”
		+
		+	Small Business Minister Gareth Thomas said:
		+
		+	“I want the UK to be the best place in the world to start a business, grow and succeed - and that’s why we’ve taken bold steps today. Too many small firms go under each year because they aren’t paid on time - that is completely unacceptable. I hear all too often about businesses who just don’t have the cash needed to start up or grow. Today, we’ve announced measures as part of our Plan for Change to tackle all of those issues and beyond. This is the government listening to businesses, working with them, and delivering real change.”
		+
		+	Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, said:
		+
		+	“Making sure businesses are paid on time, that our high streets thrive, and creating conditions in which everyone can start and succeed in business are crucial priorities for small businesses, communities and the economy. It’s very welcome that the Prime Minister has today made them his Government’s priorities. I’m pleased that FSB and the Government have been able to work in lockstep on the bold and ambitious measures needed to tackle the scourge of late payment through legislation, and other pro-growth, pro-small business measures. Today’s plan is an encouraging commitment from the Government to take the side of small businesses in the great growth challenge ahead.”
		+
		+	Rob Driscoll, ECA Director of Legal & Business, commented on behalf of Actuate UK’s Business Group:
		+
		+	“Finally, Government is consulting on how best to reconcile unfair and delayed payment practices. In recognition of the need to ‘go further, faster’, Government’s engagement on how to reform retentions marks a seminal once-in-a-generation moment for the industry to come together and shape reform in an area which has stifled growth, innovation and training, crippling supply-chain cash-flow and amplifying the repercussions of insolvency for over a century. Let’s hope industry can come together, give clients the comfort they need and suppliers the protect they need, in order to make our industry more resilient to deliver the UK’s built environment.”

	[[Category:Articles_needing_more_work]]		[[Category:Articles_needing_more_work]]

Editor: moved Government unveils Small Business Plan to support SMEs to Industry welcomes long awaited Government support SMEs

2025-07-31T14:26:45Z

moved Government unveils Small Business Plan to support SMEs to Industry welcomes long awaited Government support SMEs

← Older revision

Revision as of 14:26, 31 July 2025

Editor at 14:17, 31 July 2025

2025-07-31T14:17:24Z

← Older revision		Revision as of 14:17, 31 July 2025
Line 1:		Line 1:
−	[[File:~~GOv uk PR SME 1000~~.jpg]]	+	[[File:GOv_uk_PR_SME_1000.jpg\|link=File:GOv_uk_PR_SME_1000.jpg]]

	= Background =		= Background =
Line 6:		Line 6:

	Small and medium-sized enterprises (SMEs) form the backbone of the UK economy, employing 60% of the workforce and generating £2.8 trillion in turnover. However, these firms often struggle with systemic challenges, particularly late payments and difficulty accessing finance. These issues hinder growth and investment opportunities for small businesses, many of which operate on tight margins.		Small and medium-sized enterprises (SMEs) form the backbone of the UK economy, employing 60% of the workforce and generating £2.8 trillion in turnover. However, these firms often struggle with systemic challenges, particularly late payments and difficulty accessing finance. These issues hinder growth and investment opportunities for small businesses, many of which operate on tight margins.
		+
		+	= Planned initiatives =

	To tackle late payments, the government will empower the Small Business Commissioner with new enforcement capabilities. This includes the authority to impose substantial fines on large firms that consistently pay suppliers late. Additionally, the Commissioner will be able to perform spot checks and enforce a 30-day invoice verification period to speed up dispute resolution. New legislation will also mandate a maximum payment term of 60 days, with plans to reduce it further to 45 days. Audit committees will be legally required to scrutinise payment practices at the board level, and mandatory interest charges will be imposed on late payments, ensuring larger companies treat small suppliers fairly.		To tackle late payments, the government will empower the Small Business Commissioner with new enforcement capabilities. This includes the authority to impose substantial fines on large firms that consistently pay suppliers late. Additionally, the Commissioner will be able to perform spot checks and enforce a 30-day invoice verification period to speed up dispute resolution. New legislation will also mandate a maximum payment term of 60 days, with plans to reduce it further to 45 days. Audit committees will be legally required to scrutinise payment practices at the board level, and mandatory interest charges will be imposed on late payments, ensuring larger companies treat small suppliers fairly.
Line 18:		Line 20:

	The government has also committed to permanently lowering business rates multipliers for the retail, hospitality, and leisure sectors, which have been particularly hard hit in recent years. Through a combination of legislative reform, financial support, and strategic initiatives, this plan marks a comprehensive and ambitious effort to level the playing field for small businesses and unlock their full potential as drivers of economic growth.		The government has also committed to permanently lowering business rates multipliers for the retail, hospitality, and leisure sectors, which have been particularly hard hit in recent years. Through a combination of legislative reform, financial support, and strategic initiatives, this plan marks a comprehensive and ambitious effort to level the playing field for small businesses and unlock their full potential as drivers of economic growth.
		+
		+	Electrical Contractors association

	[[Category:Articles_needing_more_work]]		[[Category:Articles_needing_more_work]]

Editor at 14:14, 31 July 2025

2025-07-31T14:14:09Z

← Older revision		Revision as of 14:14, 31 July 2025
Line 1:		Line 1:
		+	[[File:GOv uk PR SME 1000.jpg]]
		+
	= Background =		= Background =

Editor: Created page with "= Background = The UK government has announced the most significant reforms in 25 years to combat late payments, an issue that costs the economy £11 billion annually and forces..."

2025-07-31T14:02:07Z

Created page with "= Background = The UK government has announced the most significant reforms in 25 years to combat late payments, an issue that costs the economy £11 billion annually and forces..."

New page

= Background =

The UK government has announced the most significant reforms in 25 years to combat late payments, an issue that costs the economy £11 billion annually and forces 38 businesses to shut down each day. These measures are part of a broader strategy to back small businesses and fuel economic growth under the “Plan for Change.” Central to this initiative is a new set of laws that will give the UK the toughest stance on late payments amongst G7 countries.

Small and medium-sized enterprises (SMEs) form the backbone of the UK economy, employing 60% of the workforce and generating £2.8 trillion in turnover. However, these firms often struggle with systemic challenges, particularly late payments and difficulty accessing finance. These issues hinder growth and investment opportunities for small businesses, many of which operate on tight margins.

To tackle late payments, the government will empower the Small Business Commissioner with new enforcement capabilities. This includes the authority to impose substantial fines on large firms that consistently pay suppliers late. Additionally, the Commissioner will be able to perform spot checks and enforce a 30-day invoice verification period to speed up dispute resolution. New legislation will also mandate a maximum payment term of 60 days, with plans to reduce it further to 45 days. Audit committees will be legally required to scrutinise payment practices at the board level, and mandatory interest charges will be imposed on late payments, ensuring larger companies treat small suppliers fairly.

The aim is to provide small businesses with certainty over payments and reduce the time they spend chasing unpaid invoices. This move is expected to improve cash flow, reduce business closures, and allow firms to reinvest in growth and innovation. Overall, the reforms are designed to eliminate the culture of late payments, which has long plagued SMEs.

In addition to addressing payment issues, the government is tackling a second major barrier for small businesses: access to finance. Many SMEs, especially new or smaller firms, find it difficult to secure loans or funding. To support them, the government is rolling out a £4 billion financial support package. This includes £1 billion for 69,000 Start-Up Loans, coupled with mentoring support to nurture a new generation of entrepreneurs.

A further £3 billion will be allocated to the British Business Bank (BBB), increasing its total guarantee to £5 billion under the ENABLE programme. This scheme provides lenders with a government-backed guarantee, encouraging them to offer loans to smaller businesses on more favourable terms, such as lower interest rates. These efforts aim to make finance more accessible and fairer for small firms, allowing them to invest, expand, or simply stay afloat.

The potential economic impact of these reforms is significant. If SME growth is accelerated by just 1% per year, it could add £320 billion to the UK economy by 2030. The reforms build on existing government initiatives such as reducing red tape, introducing High Street Rental Auctions to revitalise empty commercial properties, revamping the Board of Trade to support small business exports, and launching the new Business Growth Service to provide SMEs with essential support.

The government has also committed to permanently lowering business rates multipliers for the retail, hospitality, and leisure sectors, which have been particularly hard hit in recent years. Through a combination of legislative reform, financial support, and strategic initiatives, this plan marks a comprehensive and ambitious effort to level the playing field for small businesses and unlock their full potential as drivers of economic growth.

[[Category:Articles_needing_more_work]]