The UK government is considering rowing back on planned legislation that shortens payment times for small suppliers after lobbying from big businesses, which warn that a squeeze on their cash flow would harm investment in the economy.
In July, Sir Keir Starmer unveiled the “toughest late payment laws in the G7” as part of a new small business strategy, which included handing powers to a commissioner to impose financial penalties for late payments and forcing large companies to disclose payment terms in annual reports.
Late payments have been blamed for holding back the economy with small businesses having to spend time chasing invoices rather than focusing on growth. The government has said the issue costs the UK economy ￡11bn a year and was to blame for 38 businesses shutting down every day.