1284 Communications welcomes confirmation from Government that a new Fair Payment Code is to be introduced.

Small Business Commissioner, Liz Barclay, today wrote to businesses to inform them that the existing Prompt Payment Code is to be strengthened.

The new Fair Payment Code will include the introduction of a 30-day payment standard and a new Gold Award category for companies delivering best practice.

Earlier this summer 1284 MD George Oliver had asked then Shadow Business Secretary Jonathan Reynolds MP about the issue.

He asked Mr Reynolds whether a Labour Government would continue with measures for swifter payment of supplier SMEs by large companies pledged by the Conservative Government after lobbying from the Federation of Small Businesses (FSB).

It came during a visit by to Leicestershire for a round table hosted by then Loughborough parliamentary candidate, now Loughborough MP, Dr Jeevun Sandher.

Updates to existing code

Set to be implemented later this year, the new code aims to reward businesses that treat their suppliers fairly and pay them promptly. 

It features three award categories, including a Gold Award that sets a 30-day payment standard, along with Silver and Bronze categories. 

The new code is designed to be more ambitious, with higher standards and aspirational goals to improve payment practices, as well as a more robust approach to compliance and enforcement.

The decision to replace the voluntary Prompt Payment Code was based on stakeholder feedback highlighting issues with its effectiveness. 

The new Fair Payment Code aims to address these concerns by setting higher standards, supporting businesses in improving payment practices, and implementing a stronger compliance and enforcement approach.

About the OSBC

The Office of the Small Business Commissioner (OSBC) today announced the new Fair Payment Code as part of a broader package of measures introduced by the Business Secretary. 

The OSBC was established in 2016 as an independent public body whose primary purpose is to tackle unfavourable payment practices that affect small businesses across the UK.

The Small Business Commissioner today emphasised the importance of fair payment practices for the UK economy. 

In an email to member businesses, she notes that sustainable and resilient businesses at all supply chain levels are crucial for increased productivity and growth. 

Quicker payments, from large suppliers to sole traders, are essential, and paying by due dates and agreeing to quicker payment terms in contracts will boost small suppliers' confidence to innovate and invest.