As the new Fair Payment Code—one of a package of new measures to curb poor and late payment practices to small businesses—launched yesterday evening (27 February), the Federation of Small Businesses (FSB) announces that it has been included in the first cohort of award winners and has won the Gold Fair Payment Code Award.
The award recognises the speed at which FSB pays its own suppliers. As a medium-sized business with operations across the UK, in London, Cardiff, Glasgow and Belfast, as well as headquarters in Blackpool, FSB’s median payment time to suppliers is just 11 days.
Businesses who apply for the Fair Payment Code scheme are awarded Gold if they pay 95 per cent of all invoices within 30 days of receipt; Silver if they pay 95 per cent of invoices just to their small business suppliers within 30 days (and others within 60); and Bronze if they pay 95 per cent of invoices to all suppliers within 60 days.
A total of 100 businesses have, on 27 February, been awarded Gold, Silver and Bronze as the first-ever list of Awards went live by the Office of the Small Business Commissioner which administers the new Code for the Department of Business and Trade. Each Award is valid for two years and every business will need to reapply for their Award at the end of each two-year period.
Julie Lilley, Chief Executive of FSB, said: “I’m proud that FSB has been awarded the Gold Fair Payment Code Award. Our median payment time is just 11 days and it’s good to be recognised for how we’ve wired the business to support our small business suppliers. I can’t overstate how crucial it is that small businesses are paid promptly; cashflow is absolutely key to a small firm’s survival—even before thinking about growth.
“The new Fair Payment Code is a great incentive for businesses to celebrate their prompt payment of small business suppliers and get recognition for doing so. I think all chief executives should now challenge themselves to sign their business up, even if it’s starting at bronze level to begin with. We need to make
paying small businesses promptly a core part of being a ‘good’ business in the UK.”
Liz Barclay, Small Business Commissioner, said: “Congratulations to FSB on their Gold Fair Payment Code Award. Everyone benefits when suppliers are paid quickly and fairly, and they thrive. Embedding a culture of fair payment practices in your business is good for your own bottom line as well as for the economy, communities and wider society.”
The new Fair Payment Code was announced in September 2024 by the Government and the Small Business Commissioner and comes after extensive campaigning by FSB. In the past year, between 60 and 70 per cent of small businesses have been affected by late payments each quarter, according to FSB research, and the issues results in 50,000 business closures each year.
Tina Mckenzie, Policy Chair at FSB, said: “The UK has had a poor payments culture for too long, where it has been acceptable to pay small businesses late. It’s time for that to change. Alongside the upcoming reform package from Government to give payment oversight to audit committees and tougher payment rules throughout public procurement supply chains, the Fair Payment Code is a major and welcome step towards the change that we need. Prompt payment and a positive supportive approach to the supply chain should be the norm, isolating poor payers.
“This new Fair Payment Code replaces the old ‘Prompt Payment Code’ which, though admirable in its intention when launched in 2014, did not end the silent crisis of late payments to small firms. Poor payers such as Carillion, which FSB campaigned against when members were being paid late, went on to worsen payment terms and collapse with unpaid bills to thousands of SMEs—despite being a signatory of the prompt payment code. The new Fair Payment Code has been designed from the lessons of that experience.”
ENDS
Notes to Editors
1. The full list of the Fair Payment Code Gold, Silver and Bronze Awardees can be viewed here.
2. Administered by the Office of the Small Business Commissioner (OSBC), the new Fair Payment Code has been launched to encourage businesses across the UK to pay promptly. Businesses may now apply for the Award tier which best suits them: Gold, Silver or Bronze. The new Fair Payment Code replaces the Prompt Payment Code. It will be more aspirational by supporting businesses which wish to improve payment practices and helping them move up from Bronze to Silver, and to Gold over time. The Fair Payment Code Awards are for two years, and every business will need to reapply for their Award at the end of each two-year period. There will is a robust complaint system in place for businesses to highlight to the OSBC those not meeting the requirements of the category of their Award or not following the principles of the Code.
3. Statistics on the number of small businesses affected by late payments are from the quarterly Small Business Index (SBI).