FSB campaigning pays off as Government announces late-payment crackdown – View from the Foyle

For too long, late payment has been one of the most damaging barriers to growth for small businesses across the UK.

The Government’s crackdown announced on March 24 marks a decisive turning point, with new laws set to end the practice of large firms using smaller suppliers as a source of free credit.

These reforms are rightly being welcomed, but they have not come about overnight. They are the result of nearly two decades of sustained, determined lobbying by the Federation of Small Businesses (FSB).

Since the financial crisis of 2008, when late payment became deeply embedded, FSB has persistently championed this issue by engaging policymakers, influencing legislation, and supporting members facing the consequences daily.

This long-term pressure has helped deliver what is set to become the strongest late payment legislation in the G7.

As a small business owner, I know first-hand the damage late payments cause, with knock-on effects felt across entire supply chains.

The scale remains stark. 68 per cent of small firms reported late payments in the last quarter, while an estimated 38 businesses close every day in the UK due to cashflow pressures.

On average, firms spend more than two working weeks each year chasing invoices, contributing to £11 billion in lost productivity. For many, this is not an inconvenience - it is an existential threat.

This matters across every region and nation, including Northern Ireland, where small and micro-businesses are the backbone of the economy. These UK-wide reforms will ensure stronger protections, clearer rules, and a more level playing field.

At the heart of the package is a fundamental shift in responsibility. The burden will no longer fall solely on small firms. Instead, those who delay payments will be held accountable. The Small Business Commissioner will be significantly strengthened, with powers to investigate proactively, compel information, resolve disputes, and issue fines.

A strict 60-day cap on payment terms will end the drift toward 90 days or more, while a mandatory interest rate of 8 per cent above base rate will apply automatically to overdue invoices. Greater transparency will also force persistent offenders to explain poor performance publicly, making late payment a board-level issue.