Crackdown on late payments in major support package for small businesses
The government has unveiled new measures to support small businesses and the self-employed by tackling the scourge of late payments, which is costing small businesses £22,000 a year on average and leads to 50,000 business closures a year.
ECA works to improve the commercial environment in which Members operate and to bring transparency to damaging practices. Learn more here.
In addition, new legislation being brought in the coming weeks will require all large businesses to include payment reporting in their annual reports - putting the onus on them to provide clarity in their annual reports about how they treat small firms. This will mean company boards and international investors will be able to see how firms are operating.
Enforcement will also be stepped up on the existing late payment performance reporting regulations which require large companies to report their payment performance twice yearly on GOV.UK.
Every quarter, 52% of small firms in the UK suffer from late payments, meaning roughly 2.6 million small firms face this issue, with the Federation of Small Businesses describing it as one of the biggest problems facing SMEs.
Late payments are just one element of the problem, with some SMEs forced to wait months for contracts to be fulfilled and some are even forced to take out loans against their own homes to manage cash flow.
Cracking down on late payments will unlock growth for 5.5 million small firms by enabling them to invest their time hiring more employees, boosting wages, and exporting around the world, rather than chasing down late payments.
Prime Minister Keir Starmer said: "We’re determined to back small businesses by unlocking their barriers to growth, and stamping out late payments is at the heart of this.
"We know how important it is for business owners to have the peace of mind and certainty around their cashflow to keep their businesses alive. Late payments cost businesses tens of thousands of pounds and is one of the biggest reasons businesses collapse.
"After years of delay, we’re bringing forward measures that small businesses have long been calling for to tackle late payments once and for all."
Business Secretary Jonathan Reynolds said: "Late payments are simply unacceptable and this government is determined to level the playing field for small business. When the cashflow runs dry, small firms go under which is why we need to hold larger business to account with their payment practices and foster an environment that supports growth and jobs.
"Slashing trade barriers, reforming business rates, getting more SMEs exporting – this government is committed to small firms. We know there’s a lot more to be done, but today we are calling time on late payers once and for all."
This article appears on the ECA news and blog site as 'Crackdown on late payments in major support package for small businesses' dated 25 September, 2024.
--ECA
[edit] Related articles on Designing Buildings
- Contract clauses.
- Fair payment practices.
- Fluctuation.
- Housing Grants, Construction and Regeneration Act.
- Improving the terms of contractor payments
- The Late Payment of Commercial Debts Regulations 2013.
- Payment notice.
- Payment terms.
- Project bank accounts.
- Prompt payment code.
- Retention.
- Scheme for construction contracts.
- Small Business, Enterprise and Employment Bill.
- The causes of late payment in construction.
- Variations.
Featured articles and news
Design and construction industry podcasts
Professional development, practice, the pandemic, platforms and podcasts. Have we missed anything?
C20 Society; Buildings at Risk List 2025
10 more buildings published with updates on the past decade of buildings featured.
Boiler Upgrade Scheme and certifications consultation
Summary of government consultation, closing 11 June 2025.
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
From project managers to rising stars, sustainability pioneers and more.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.