New bill cracks down on late payments
The UK government has introduced the Small Business Protections (Late Payments) Bill, after its announcement in the King’s Speech.
The new legislation will introduce a 60-day cap on large firms’ payment terms for smaller suppliers, mandatory interest on overdue invoices, and enhanced enforcement powers.
Overdue invoices will automatically be subject to a statutory interest rate, set 8% above the Bank of England base rate.
The Small Business Commissioner has also been given stronger powers to investigate poor payment practices and issue financial penalties to persistent late payers.
Fiona Hodgson, Chief Executive of SNIPEF, said: “Delayed payments and withheld retentions continue to place unnecessary pressure on cash flow, investment and apprenticeship recruitment. Reforms must be practical, proportionate and avoid creating costly or complex alternative arrangements that could disproportionately impact SMEs.”