Small and medium-sized enterprises (SMEs) have long been the backbone of the UK economy — employing over 60% of the workforce and contributing nearly £3 trillion in turnover. Yet for years, they’ve been disproportionately impacted by late payments from larger firms, often waiting months to be paid for work that’s already been completed. That’s about to change.
In a major announcement this week, the UK Government unveiled its most comprehensive plan in a generation to support small businesses — and at the heart of it is a tough new crackdown on late payments.
Late Payments: A £11 Billion Problem
Late payments cost the UK economy an estimated £11 billion a year and are responsible for closing 38 small businesses every single day. Whether it’s builders, designers, shop owners or freelancers, too many are forced to spend hours chasing overdue invoices instead of focusing on running and growing their businesses.
The Government’s new Small Business Plan promises to turn the tide. Among the proposed changes:
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Stronger powers for the Small Business Commissioner, including the ability to issue fines to large firms that consistently pay late
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A maximum 60-day payment term, reducing to 45 days
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Mandatory 30-day invoice verification periods to resolve disputes more quickly
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Legal requirements for audit committees to monitor and report on payment practices
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Mandatory interest charges on overdue payments
These measures are designed not just to prevent exploitative practices, but also to free up time and unlock growth opportunities for SMEs that are too often hamstrung by poor cashflow.
A Bigger Plan for Small Business
This isn’t a standalone policy. The reforms are part of a wider Plan for Change, which also includes:
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A £4 billion finance package, including 69,000 Start-Up Loans
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A £3 billion boost to the British Business Bank, enabling better access to affordable loans
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Permanent business rates relief for 700,000 properties
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Licensing and planning reforms to revitalise the high street
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A new Business Growth Service to help SMEs find the support they need quickly
The message from government is clear: small businesses will no longer be left behind.
More Money In — Now Let’s Talk About Less Going Out
For SMEs, improved payment practices and better access to funding are game-changers. But better cashflow is only half the battle. What you do with that cash matters just as much.
That’s where Black Sheep Utilities steps in.
We help SMEs take control of their monthly outgoings by sourcing the best deals across gas, electricity, water, telecoms and more — often uncovering hidden savings that go unnoticed. In addition to securing great rates, we support businesses with billing queries, fraud investigations, and offer dedicated account managers who make navigating complex utility contracts easy.
If the Government is finally doing its part to get SMEs paid on time, our mission is to make sure your money goes further once it hits your account.
Let’s Make This Work for You
This is a new era for small businesses in the UK — one where you’re no longer left waiting to be paid, and no longer expected to overpay on your essential services.
We’re proud to be outstanding in our field, combining market expertise with a personal touch to deliver real, measurable savings for small businesses across the UK.