A package of new measures to support small businesses and deliver growth is being set out today in the run up to Small Business Saturday this weekend.
It includes targeted action to a crack down on late payments and to unleash the potential of disabled and female entrepreneurs.
A new ‘Fair Payment Code’ is being launched to address the problems with late payments, with research showing that SMEs are on average owed £22,000 a year. It comes on top of an earlier announced consultation which will investigate the scale of the problem and best solutions.
The code, overseen by the Small Business Commissioner Liz Barclay, introduces a gold, silver, and bronze system to reward best payment practices and help smaller firms identify reliable and trusted partners. It aims to boost cash flow for small businesses which is crucial for their survival, by tackling late payments and lengthy payment terms that can lead to financial strain and failure.
The code aims to boost cash flow for small businesses, crucial for their survival, by tackling late payments and lengthy payment terms that can lead to financial strain and failure.
It comes as the Prime Minister invites small business leaders and small business representative organisations from across the UK to a reception in Downing Street to celebrate their achievements and their crucial role in economic growth. Some of the businesses set to attend include Kim Innes, CEO and Founder of Humble Crumble, Freddie Blackett, Founder of Patch Plants and former Paralympian swimmer and medallist, Mark Williams who founded LIMB-Art.
Liz Barclay, Small Business Commissioner said: “The Fair Payment Code is our response to all those suppliers who begged for a more aspirational, robust and ambitious approach to changing the business to business payment culture in the UK. It also gives a clear signal of intent on the part of Government.
“We want suppliers paid within 30 days with payment beyond the due date a rare event. We want longer contractual payment terms to be recognised as potentially detrimental to vital supply chains. We want businesses of all sizes to commit to fair and quick payments and to avoid harmful disputes. This new Code will drive a better payments culture and benefit everyone.”
