ICSM Print Business Insolvency News: ICSM's Ian Carrotte welcomes the Government’s Fair Payment Code but has doubts over its effectiveness with many firms waiting up to 120 days to get paid
By Harry Mottram: Ian Carrotte the CEO of ICSM – the business membership group fighting late and non-payment – has welcomed the Fair Payment Code introduced by the Government proposals but warns of its limitations.
In an interview with the trade publication Print Week when it was out for consultation in 2025 he cautioned that the rules only applied to large companies with more than 250 workers.
He told journalist Richard Stuart-Turner: “While some larger outfits do abuse payment terms the same is true for businesses with few workers. In our experience a business with just a handful of staff can delay payment just as much as the larger ones.
“Late payment is a curse and can send firms to the wall, as their cashflow dries up if they rely on a small number of clients who pay late. We have seen so many businesses fail due to either a large bad debt, late payment which increases costs, or they simply give up and close the business, as too many sleepless nights can cause the owner unbearable stress.
“I’ve known small business owners who have had enough of chasing late payment and who have had their lenders putting pressure on them while they try to pay their own suppliers. They lie awake at night wondering how they will pay their staff or settle an overdue invoice and think ‘this is not worth it’.
“So, anything from the government that changes the culture of late payment by giving suppliers more legal leverage to get paid on time is welcome. And it is about business culture as in some sectors prompt payment is normal.”
Late payments cost the UK economy almost £11 billion per year with 14,000 businesses closing each year because of late payments, equivalent to 38 businesses every day. So far 450 businesses have signed up to the Fair Payment Code for the code with its Gold, Silver and Bronze levels. However the SME Confidence Tracker, which surveys 1,000 UK SMEs, showed that over half (52%) of small businesses believe measures will fail to protect and support them.
The Government backed Fair Payment Code encourages businesses to pay fairly and quickly and includes a Small Business Commissioner whose role is to monitor and enforce the code.
Data published earlier in 2025 by finance provider Novuna Business Cash Flow found that late payment is one of the biggest threats to SME survival, with the average small business reportedly losing £22,000 a year to overdue invoices. Furthermore, 40% of B2B invoices in the UK are overdue, and 7% of sales are written off as bad debt reported Print Week. Worse still in an industry survey by the BPFI the majority of printers said payment from clients was up to 90 days while 13% experience payment up to 120 days.
The Fair Payment Code is a tiered system of Awards aimed at driving best practice and improving payment performance.
- The Fair Payment Code has Gold, Silver and Bronze Award categories underpinned by fair payment principles.
- There are no charges associated with being part of the Fair Payment Code.
The UK Government backed Fair Payment Code encourages businesses across the UK to pay fairly and quickly. Businesses apply for the Award tier which best suits them: Gold, Silver or Bronze.
The three Awards are:
Gold Award – for those firms paying at least 95% of all invoices within 30 days
Silver Award – for those paying at least 95% of all invoices within 60 days, including at least 95% of invoices to small businesses within 30 days
Bronze Award – for those paying at least 95% of all invoices within 60 days
In addition, every business granted an Award agrees to abide by the Code’s principles of being Clear, Fair and Collaborative with their suppliers. Since launching in December 2024 over 450 businesses of all sizes and across a huge range of industries have become Code Awardees.
The Fair Payment Code Awards are for two years, and every business needs to reapply for their Award at the end of each two-year period. The best time to apply is between September – December to ensure you get a full two years but applications are accepted throughout the year.
There is a robust complaint system in place for businesses to highlight Awardees that are not meeting the requirements of their Award category (Gold, Silver or Bronze) or not following the principles of the Code.
The Fair Payment Code is administered by the Office of the Small Business Commissioner on behalf of the UK Government.
The Fair Payment Code has replaced the Prompt Payment Code.
Struggling with Late Payers or Bad Debt?
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• Late payment interest, compensation, and fees recovered under the Late Payment of Commercial Debts Regulations 2002
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