DBT Late Payments Consultation

The UK government has launched a consultation proposing a package of reforms to tackle late business-to-business payments. The package aims to improve cash flow for suppliers, increase transparency and board-level accountability, and strengthen enforcement against persistent late payment.

Summary of proposed measures:

1. Mandatory board-level scrutiny and audit-committee oversight of large companies’ payment performance to increase executive responsibility.
2. Introduction of maximum payment terms to limit how long suppliers can be paid.
3. A fixed deadline for disputing invoices to discourage prolonged withholding of payment during alleged disputes.
4. Mandatory statutory interest for late payments to suppliers can recover interest without court action.
5. Additional reporting requirements on statutory interest to increase disclosure when interest is charged or owed.
6. Financial penalties for persistent late payers.
7. Expanded powers for the Small Business Commissioner, including access to and assurance of payment reporting data to strengthen oversight and supplier support.

FDF is planning to respond to the consultation and we are currently formulating our positions. We would very much welcome conversations and feedback from both large and small member companies to understand your perspectives. We are particularly interested to hear:

• Large companies: your concerns about the proposals and any current programmes or practices you use to support SMEs.
• Small companies: your experiences of late payment and the practical implications for your business.

If you would like to discuss any of the above, please contact Tanya who is leading on our response. We plan to send a draft response to members for review the week beginning 6^th October ahead of submission on the 23^rd October.