The Government has announced the launch of a new Fair Payment Code aimed at tackling 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.
Tackling Commercial Late Payment
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. Businesses can sign up to be part of the code by clicking here.
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.
Small businesses are the lifeblood of our communities and play an essential role in delivering growth – 99.8% of businesses in the UK are small businesses and they employ over 60% of the British workforce.
Business Rising Costs
Businesses have faced unprecedented challenges over the past few years from the pandemic to soaring inflation, interest rates and energy bills. That’s why the government’s first priority is to fix the foundations and restore economic stability.
Today’s measures aim to support entrepreneurs and wealth creators across the UK and sit at the heart of the Government’s mission to grow the economy and create jobs.
Small Business Minister Gareth Thomas said “This government’s primary ambition is clear: to go for growth. To do that, we must unleash the potential of our entrepreneurs.
These measures will help remove barriers that are holding our small businesses back and ensure everyone has the backing they need to succeed.”
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 disputes. This new Code will drive a better payments culture and benefit everyone.”
The package, announced in the run up to Small Business Saturday this weekend, includes a shared initiative with leading banks, such as Barclays, HSBC UK, Lloyds Banking Group and NatWest, to support disabled entrepreneurs to access the finance required to start their own firms.
Research from the Lilac review found that if opportunities were improved for disabled founders, it could unlock an additional £230 billion for the UK economy in growth and jobs.
The Disability Finance Code for Entrepreneurship aims to boost access to finance for disabled entrepreneurs and encourage greater engagement between the financial services sector and the disabled entrepreneur community, with the aim to tackle inequality and could according to the Lilac Review, unlock £230bn in untapped potential.
Barclays, HSBC UK, Lloyds Banking Group, and NatWest have all signed up to this new scheme committing to improve access to finance products, improved mentoring, for entrepreneurs, showcase more disabled success stories and to actively support disabled representation in their firms.
David Raw, Managing Director of Commercial Finance at UK Finance said “UK Finance is pleased to have collaborated with the Department for Business and Trade, the British Business Bank and representatives of the Lilac Review Steering Board on the development of the Disability Finance Code for Entrepreneurship.
“The banking and finance industry understands the importance of supporting entrepreneurs with disabilities and improving access to finance for all. Many lenders already have commitments and activities in place to support customers with disabilities and will continue to develop and enhance these to support customer needs.”
Joseph Williams, CEO and co-founder of small business Clu said “When disabled entrepreneurs are given equal access to finance, society gains in ways that go far beyond individual success. Inclusive entrepreneurship drives innovation, creates diverse workplaces, and encourages economic growth that benefits everyone.
“The Disability Finance Code paves the way for a fairer financial system that doesn’t leave talent untapped. By supporting disabled entrepreneurs, we’re investing in a more inclusive future, where everyone has the opportunity to contribute, strengthening our economy and society as a whole
