{"id":26154,"date":"2025-07-08T14:25:47","date_gmt":"2025-07-08T14:25:47","guid":{"rendered":"https:\/\/www.simplybusiness.co.uk\/?post_type=knowledge&p=26154"},"modified":"2025-07-08T14:25:48","modified_gmt":"2025-07-08T14:25:48","slug":"government-crackdown-on-late-payments","status":"publish","type":"knowledge","link":"https:\/\/www.simplybusiness.co.uk\/knowledge\/cash-flow\/government-crackdown-on-late-payments\/","title":{"rendered":"Fair Payment Code \u2013 is it helping small businesses?"},"content":{"rendered":"\n

Almost all small business owners (97 per cent) haven\u2019t seen any reduction in late payments since the government\u2019s Fair Payment Code was introduced, according to data from Simply Business. <\/p>\n\n\n\n

Under new laws, larger companies will be held to account and the Small Business Commissioner has greater enforcement powers. But with the issue of late payments persisting for most businesses, it seems the initiatives are yet to have an impact.<\/p>\n\n\n\n

Is the government\u2019s late payment strategy working?<\/h2>\n\n\n\n

With our research finding that small businesses were owed an estimated \u00a332 billion in late payments<\/a> in 2023, it’s clear the scale of the problem is huge.<\/p>\n\n\n\n

Back in October 2024, the government announced a range of measures to help reduce the problem of late payments for small businesses, including a new Fair Payment Code. <\/p>\n\n\n\n

But since then, a Simply Business survey of over 900 business owners<\/a> found that only three per cent have seen a reduction in late payments. And for 12 per cent of small business owners, there\u2019s been a concerning increase in late payments since the introduction of the Fair Payment Code.\u00a0<\/p>\n\n\n\n

Not all of the government\u2019s measures have been introduced yet, with the rest set to come in by July 2025. And with the Fair Payment Code<\/a> only starting in January, small businesses owners may need to wait to see any improvements. <\/p>\n\n\n\n

What\u2019s more, wider economic challenges, such as President Trump’s trade tariffs<\/a>, are squeezing profits for many. businesses, which could be making late payments worse.\u00a0<\/p>\n\n\n\n

What are the government\u2019s plans to reduce late payment to small businesses? <\/strong><\/h2>\n\n\n\n

Prime minister Sir Keir Starmer said that \u2018stamping out late payments\u2019 is \u2018at the heart\u2019 of the government\u2019s plans to \u2018unlock barriers to growth\u2019 for small businesses.<\/p>\n\n\n\n

The government estimates that the new measures will help 5.5 million small businesses to benefit from improved cash flow<\/a>. They\u2019ll also be able to spend more time growing their business, rather than chasing late payments.<\/p>\n\n\n\n

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This is what\u2019s proposed in the legislation:<\/p>\n\n\n\n