The Government’s ‘Backing your business: our plan for small and medium-sized businesses’ has been published — and it’s a significant step toward supporting SMEs like many of our members.
The plan aims to help start, grow and build resilience in small businesses across the UK. Crucially, it includes legislating to end late payments, which cost the UK economy £11 billion a year and are responsible for closing 38 UK businesses every day — a challenge many in our sector will be all too familiar with.
To support this, the Department for Business and Trade has launched a consultation seeking views on proposed legislative measures to ensure companies pay their suppliers promptly and fairly.
The proposed measures include:
- Increasing board-level scrutiny of payment practices in large companies.
- Setting maximum payment terms at 60 days, removing exemptions that allow longer terms.
- Introducing a 30-day invoice verification period for disputes.
- Giving the Small Business Commissioner powers to investigate, fine, and arbitrate late payment cases.
- Conducting spot checks to verify large businesses’ payment reporting.
- Fining repeat late payers.
- Making interest on late payments mandatory, with no option to negotiate lower compensation.
- Requiring businesses to report statutory interest paid due to late payments.
- Introducing reform to retention clauses in construction contracts — either banning them or requiring protections for retained funds.
This is a pivotal opportunity for the shopfitting and fit-out sector to share real-world experiences and influence legislation that could lead to faster, fairer payment practices across construction.
This consultation will run for 12 weeks and close at 11:59pm 23 October 2025. Further details can be found here.
Research looking at how late payments affect businesses has also been published.
