According to government data, late payments are costing UK small businesses an average of £22,000 per year, with over 56 million hours of lost productivity. And with an estimated 50,000 business closures each year linked to unpaid invoices, the impact is clear: late payments are one of the biggest threats to SMEs today.
Now, after years of pressure, the UK Government is finally stepping in — with a new package of measures aimed at tackling late payment culture head-on.
What’s Changing?
In September 2024, the Department for Business and Trade unveiled a new crackdown on late payments, including:
- New legislation requiring large companies to report payment performance in annual reports
- Tougher enforcement for firms that don’t comply — including potential criminal charges
- A new Fair Payment Code replacing the old Prompt Payment Code
- Government consultation on stronger rules for audit committees and board-level accountability
The Fair Payment Code is a tiered award system designed to drive better payment culture. It recognises businesses that pay fairly and quickly, with awards based on real-world performance:
- Gold Award: 95%+ of invoices paid within 30 days
- Silver Award: 95%+ of all invoices paid within 60 days — and 95% of small business invoices paid within 30
- Bronze Award: 95%+ of invoices paid within 60 days
Participating businesses also agree to act in a way that is Clear, Fair and Collaborative with suppliers — with a complaints system in place for those falling short of their commitment.
But SMEs Still Need Solutions Right Now
These changes are promising — but they won’t happen overnight. Consultations are ongoing. Legislation takes time. And if you’re currently chasing overdue invoices, you don’t have months to wait.
That’s where Collect Compare can help. If you’re owed £500 or more, we make it easy to compare vetted debt recovery agencies — so you can take action quickly, confidently and without endless calls.
- One form — one recommended agency based on your needs
- Tailored matches based on the type of debt and your location
- No pressure, no obligation — you’re in control
It’s Time to End the Excuses
Too many big companies have treated SMEs like interest-free overdrafts. That’s finally being challenged — and rightly so. But you don’t have to wait for legislation to start reclaiming control of your cashflow.
If you’ve done the work, you should be paid — full stop. Whether you take legal steps, escalate through a debt collection agency, or start with a Letter Before Action, the most important thing is this:
Don’t let your business be another statistic. Take action today — because change might be coming, but your invoice is already overdue.
