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<p>The Prompt Payment Code (‘the Code’) encourages businesses to aim for 30-day payment
terms as the norm, with 60 days as the maximum. Signatories commit to paying 95% of
invoices within 60 days, unless there are exceptional circumstances.</p><p> </p><p>In
the recent Government Response to the Creating a Responsible Payment Culture Call
for Evidence we announced that responsibility for the Code is to move to the Small
Business Commissioner and that the Code will be reformed, following engagement with
existing Code signatories. We are also keen to increase the number of businesses signed
up to the Code.</p><p> </p><p>UK legislation already establishes maximum 30-day payment
terms for transactions with public authorities and 60-day payment terms between businesses,
unless they agree longer terms and those terms are not grossly unfair to the supplier.</p><p>
</p><p>Government has worked closely with trade bodies and businesses to develop this.
Mike Cherry, FSB National Chairman, said of the recent announcement: “Small businesses
will be delighted with today’s announcement” and “the measures today could finally
see an end to poor payment practice. Changing our business culture will boost the
small business community, productivity and growth.”</p>
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