Policy Threads

Late Payment Common Framework

The Department for Business and Trade is implementing a Late Payment Common Framework to tackle poor payment practices and late payments between businesses, particularly affecting small and medium enterprises. The framework follows government consultation and aims to improve cash flow and business viability through stronger payment discipline. Current status includes government response to consultation and framework implementation.

11 Feb 2026 | Committee report linked

The Government is right to recognise the risks to SMEs posed by late payments. Until there is new legislation, the Fair Payments Code should become the minimum expectation, rather than an optional extra, for all firms over 250 employees. (Conclusion, Paragraph 38)

The Government is right to recognise the risks to SMEs posed by late payments. Until there is new legislation, the Fair Payments Code should become the minimum expectation, rather than an optional extra, for all firms over 250 employees. (Conclusion, …

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11 Feb 2026 | Committee report linked

The Government should accelerate its late payments legislation and mandate 30-day payment terms by the end of this Parliament. In the meantime, procurement rules should be updated to require all large suppliers to have a Fair Payments Code Gold award. (Recommendation, Paragraph 39)

The Government should accelerate its late payments legislation and mandate 30-day payment terms by the end of this Parliament. In the meantime, procurement rules should be updated to require all large suppliers to have a Fair Payments Code Gold award. …

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11 Feb 2026 | Committee report linked

Late payments pose a particularly acute threat to firms in the construction sector. The Government’s construction playbook sets out that Project Bank Accounts should “be used unless there are compelling reasons not to.” This loophole had permitted government departments to turn a blind eye to poor payment practices amongst their contractors. The Government should update its construction playbook to end this loophole and drive meaningful improvements in SME cashflow. (Conclusion, Paragraph 47)

Late payments pose a particularly acute threat to firms in the construction sector. The Government’s construction playbook sets out that Project Bank Accounts should “be used unless there are compelling reasons not to.” This loophole had permitted government departments to …

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