Overview
- The reform package, which ministers unveiled Tuesday, enters consultation now and will need legislation before companies must comply.
- Large firms would face a 60-day limit when paying smaller suppliers with mandatory interest 8% above the Bank of England rate for late bills, meaning a £10,000 invoice paid 60 days late adds about £193 in interest plus £100 compensation.
- The Small Business Commissioner would investigate poor practices, adjudicate disputes, and fine persistent late payers, and large-company boards must publish explanations for poor payment records.
- The government proposes banning retention payments in construction contracts, and it has opened a consultation on how to implement the ban.
- Ministers cite an £11 billion annual cost and about 38 closures a day linked to late payment, and groups such as the Federation of Small Businesses and ACCA back the plan as the strongest in the G7.