BENNETT Williams Solicitors, a specialist debt recovery law firm, has welcomed the Government’s announcement of the toughest late payment reforms in a generation.
The measures, unveiled on July 30 as part of the Government’s Small Business Plan, aim to tackle the chronic problem of overdue invoices, which cost the UK economy an estimated £11 billion every year and force 38 businesses to close their doors daily. For decades, SMEs have battled a culture of late payment that drains resources, delays investment and pushes otherwise healthy firms to the brink.
Under the proposals, the Small Business Commissioner will be given sweeping new powers to spot-check firms, enforce a 30-day invoice verification period and issue multi-million-pound fines against repeat offenders. Maximum payment terms will be capped at 60 days, falling to 45, while interest charges on late invoices will be mandatory.
Large companies will also face board-level scrutiny of their payment practices, ensuring accountability reaches the top.
Richard Bennett, Principal Solicitor at Bennett Williams Solicitors, said: “Late payment has been a scourge on small businesses for far too long. Reform in this area is long overdue, and this package is the most wide-ranging we’ve seen in 25 years.
“If enforced properly, these new rules should finally give SMEs confidence that they will be paid fairly and on time – something that should be a basic right, not a constant battle.
“By enshrining maximum payment periods and imposing statutory interest penalties, the changes have the potential to accelerate recoveries, encourage earlier escalation of unpaid invoices, and strengthen the hand of small businesses in disputes with larger clients. In short, it would mean less time wasted chasing overdue bills and more time focusing on growth.”
Industry groups including the Federation of Small Businesses have welcomed the reforms, hailing them as a major boost for small firms. Of course, the effectiveness of these reforms will ultimately depend on how consistently the new powers will be applied, and whether large companies will treat payment reporting as meaningful accountability rather than a tick-box exercise.
Richard added: “The culture of late payment that has plagued SMEs for decades is finally being addressed, and that can only be a positive step.
“The country needs meaningful change. SMEs represent the vast majority of UK businesses, employing millions of people across the country.
“Businesses that don’t need to fight tooth and nail for what they are owed and just survive have the potential to truly grow – and move the entire economy forward with them.“
For more information, visit the Bennett Williams website.
