More than 400 UK companies have been officially recognized by the government for paying their suppliers on time and fairly under the Fair Payment Code, a program run by the Office of the Small Business Commissioner.
The code, launched in December 2024, is part of a nationwide campaign to tackle the late payment culture in the UK, which costs the economy £11 billion every year and leads to the closure of an estimated 14,000 small businesses every year – the equivalent of 38 businesses every day.
The milestone marks a growing movement by large and medium-sized companies to improve cash flow across supply chains, particularly at a time when small businesses continue to face high borrowing costs and fragile margins.
The Fair Payment Code Awards recognize organizations that demonstrate clear, transparent and reliable payment practices. The award winners commit to adhering to three central principles: dealing clearly, fairly and cooperatively with their suppliers.
To qualify, businesses must provide detailed evidence of their payment history, verified through a rigorous assessment process. There are three reward tiers based on bill payment performance:
• Gold Award – for companies that pay at least 95% of all invoices within 30 days.
• Silver Award – for those who pay at least 95% within 60 days and 95% of small business invoices within 30 days.
• Bronze Award – for companies that pay at least 95% of all invoices within 60 days.
Each award is valid for two years. Companies must then reapply and be reassessed.
Applications for the next round of awards are possible. Companies are encouraged to apply between September and December to secure a full two-year recognition period.
Emma Jones (pictured)the UK Small Business Commissioner, said the milestone demonstrated the growing desire for responsible business conduct and the wider benefits of a good payments culture.
“It’s fantastic to be celebrating this Fair Payment Code milestone with businesses across the UK,” said Jones.
“The award winners are leaders in making payments fair and fast, keeping money flowing in the economy and driving growth in supply chains. But this is just the beginning – I want to see more companies adopt the Code so we can continue to build a positive payments culture where paying on time is simply seen as the right thing to do.”
Jones added that timely payments are particularly important in a difficult economic environment, where small and medium-sized enterprises (SMEs) often act as the backbone of supply chains but lack the liquidity to absorb delays.
Companies recognized under the code include major financial institutions, including NatWest Group, which has Gold Award status.
Ken McHugo, head of supply chain at NatWest Group, said the award reflected the bank’s responsibility to model good practice for its business customers.
“NatWest Group is the UK’s largest business supporter, with more than 1.5 million customers – from start-ups and SMEs to multinationals,” McHugo said.
“We know first-hand from our commercial banking customers how important timely payment is to cash flow, success and growth. With the Gold Award for the Fair Payment Code, we have demonstrated our commitment to supporting suppliers through efficient payment processes.”
The late payment problem in the UK has long been a source of frustration for smaller businesses. According to a recent study by the Federation of Small Businesses (FSB), one in four small businesses are paid late by larger customers, while 37% cite late payments as their biggest financial challenge.
The Fair Payment Code, combined with the Prompt Payment and Cash Flow Review, is part of the Government’s wider strategy to create a “fairer, faster payments culture” that ensures businesses are rewarded for their work without undue delays.
As more companies commit to the code, leaders hope to create a benchmark of best practice that promotes accountability across sectors – from construction and retail to finance and technology.
“It is critical that money flows quickly through the economy,” Jones said. “When companies get paid on time, they can invest, hire and grow – and that benefits everyone.”
