On 6 December 2025, the Department for Business and Trade used Small Business Saturday to encourage people to shop local. Ministers highlighted 5.7 million small businesses employing 60% of the workforce and generating £2.8 trillion in turnover, forecasting a £5 billion seasonal boost for SMEs with spending up 19% on last year.
The push sits within a new ‘Backing Your Business’ campaign aligned to the government’s Small Business Plan. Business and Trade Secretary Peter Kyle framed the package as targeted help for sole traders, start-ups, high-street retailers and family firms to access practical support and advice.
Late‑payment reform is the centrepiece. Proposals would expand the Small Business Commissioner’s powers to conduct spot checks and levy fines on persistent late payers, require a 30‑day invoice verification period, and reduce the maximum payment term from 60 to 45 days after a transition. Government assessments put the economic cost of late payment at around £11 billion a year, with many closures linked to payment delays. The consultation has concluded and a formal response is due in the new year.
Transparency is being strengthened through the Reporting on Payment Practices and Performance Regulations 2017, extended for up to seven years from April 2024. New metrics add the value of invoices paid late, the proportion of disputed invoices, clearer reporting where supply‑chain finance is used, sector identifiers, and retention practices for construction contracts, improving comparability and scrutiny.
Public procurement rules already embed faster payment expectations. Cabinet Office policy targets five‑day payment for small suppliers and 30 days for SME invoices, while the Procurement Act 2023 requires bidders for central contracts above £5 million to show 55‑day performance, reducing to 45 days in 2025 and then 30 days. A voluntary Fair Payment Code launched in December 2024 recognises firms that consistently pay quickly.
Access to finance accompanies the reforms. The package signals at least £4 billion of support, including more than £1 billion for 69,000 Start Up Loans with mentoring and further lending via the British Business Bank’s ENABLE Guarantees. The Bank has since set out over £4.5 billion in allocations: the Growth Guarantee Scheme extended to April 2030, Start Up Loans scaled up, and ENABLE capacity lifted by £3 billion; by 30 June 2025 Growth Guarantee had supported £2.6 billion through 16,082 facilities.
For small firms, the immediate task is cashflow discipline with clearer routes to redress. Finance leads may wish to re‑forecast on a 45‑day ceiling for large‑customer invoices once implemented, log invoice acceptance within 30 days, include contractual interest on late bills, and escalate persistent issues to the Small Business Commissioner. Where growth is constrained by working capital, Start Up Loans and guaranteed lending can supplement bank facilities.
For larger companies, oversight is shifting from policy to board assurance. Audit committees are set to scrutinise supplier payment practices, with failures risking penalties and adverse public reporting under strengthened disclosure rules. Boards should benchmark current performance, tighten dispute resolution, enable e‑invoicing and update vendor terms ahead of a 45‑day standard.
The campaign sits alongside broader cost measures flagged by the government: a £150 reduction to household energy bills, freezes to rail fares and prescription charges, a higher National Insurance threshold for small employers, electricity price support for manufacturers, fully funded training for under‑25 apprentices in small businesses, expanded free childcare and a capped rise in business rates backed by a £4.3 billion package. Officials also point to widened enterprise tax incentives and simpler permissions for outdoor dining; businesses should check scheme‑specific guidance and start dates.
Delivery will be staged. The Department for Business and Trade says it will publish its late‑payment consultation response in early 2026 ahead of legislation. In parallel, the new Business Growth Service is being rolled out through regional roadshows to bring national and local support into a single access point for SMEs.