Small businesses in the UK are set to receive the most substantial package of support in decades as the government launches its Plan for Change, aiming to create a fairer and more dynamic environment for entrepreneurs.
The government plans to introduce the toughest late payment laws in the G7, marking the most significant legislative overhaul on the issue in 25 years.
Under the proposals, the Small Business Commissioner will gain new enforcement powers, including the ability to issue multi-million-pound fines to large firms that repeatedly delay paying suppliers. The Commissioner will also be authorised to carry out spot checks, enforce a 30-day invoice verification limit, and oversee new maximum payment terms — initially capped at 60 days and later reduced to 45.
Large company audit committees will be legally required to review payment practices, and firms that fail to meet deadlines will face mandatory interest charges. These measures aim to speed up cashflow, reduce time wasted chasing invoices, and help small firms focus on growth.
The Plan for Change also includes a £4 billion finance boost, featuring 69,000 Start-Up Loans to encourage new entrepreneurs and expand small business funding.
With small and medium-sized enterprises employing 60% of the UK workforce and generating £2.8 trillion in turnover, ministers say the changes are vital to unlocking economic growth. Prime Minister Keir Starmer emphasised that the reforms will “put an end to the scourge of late payments” and ensure small business owners have the stability and backing they need to succeed.
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