UK Fair Payment Code and Small Business Commissioner Statistics 2026
The Fair Payment Code replaced the 5,000-signatory Prompt Payment Code in December 2024, adding mandatory reapplication and spot checks. The Small Business Commissioner has recovered £10m for small firms since 2017, £1.5m in 2025-26 alone, while Small Business Commissioner research from July 2025 estimates that late payment costs the economy almost £11bn a year and closes 14,000 businesses a year.
Key statistics
Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance). Source: UK Finance
The Fair Payment Code launched, replacing the Prompt Payment Code. Source: Small Business Commissioner
Signatories to the former Prompt Payment Code before its replacement. Source: Small Business Commissioner
Reapplication cycle for Fair Payment Code Gold, Silver and Bronze awards. Source: Small Business Commissioner
Recovered for small businesses by the Small Business Commissioner's dispute service since 2017. Source: Small Business Commissioner
Recovered by the Small Business Commissioner in the 2025-26 financial year, the highest in over five years. Source: Small Business Commissioner
Recovered by the Small Business Commissioner in December 2025 alone. Source: Small Business Commissioner
Date mandatory 30-day payment terms took effect for tier 1 and 2 public sector supply chains under the Procurement Act 2023. Source: GOV.UK
Annual contract value threshold above which public bodies must run PPN 021 payment spot checks. Source: GOV.UK
Minimum number randomly reviewed in each public sector payment spot check, at least every six months. Source: GOV.UK
Turnover, balance sheet and employee thresholds triggering the statutory duty to report on payment practices (a business meeting 2 or all 3 is in scope; thresholds raised from £36m and £18m on 6 April 2025). Source: GOV.UK, duty to report guidance
Businesses that close each year because of late payments, across the UK economy (July 2025 research commissioned by the Department for Business and Trade). The same research estimates that late payment costs the economy almost £11bn a year. Source: Small Business Commissioner
Average amount owed in late payments per UK business affected by late payment. Source: Small Business Commissioner
| Metric | Value | Source |
|---|---|---|
| Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance). | £20bn+ | UK Finance |
| The Fair Payment Code launched, replacing the Prompt Payment Code. | December 2024 | Small Business Commissioner |
| Signatories to the former Prompt Payment Code before its replacement. | 5,000+ | Small Business Commissioner |
| Reapplication cycle for Fair Payment Code Gold, Silver and Bronze awards. | 2 years | Small Business Commissioner |
| Recovered for small businesses by the Small Business Commissioner's dispute service since 2017. | £10m | Small Business Commissioner |
| Recovered by the Small Business Commissioner in the 2025-26 financial year, the highest in over five years. | £1.5m | Small Business Commissioner |
| Recovered by the Small Business Commissioner in December 2025 alone. | £500k+ | Small Business Commissioner |
| Date mandatory 30-day payment terms took effect for tier 1 and 2 public sector supply chains under the Procurement Act 2023. | 24 Feb 2025 | GOV.UK |
| Annual contract value threshold above which public bodies must run PPN 021 payment spot checks. | £5m | GOV.UK |
| Minimum number randomly reviewed in each public sector payment spot check, at least every six months. | 10 invoices | GOV.UK |
| Turnover, balance sheet and employee thresholds triggering the statutory duty to report on payment practices (a business meeting 2 or all 3 is in scope; thresholds raised from £36m and £18m on 6 April 2025). | £54m / £27m / 250 | GOV.UK |
| Businesses that close each year because of late payments, across the UK economy (July 2025 research commissioned by the Department for Business and Trade). The same research estimates that late payment costs the economy almost £11bn a year. | 14,000 | Small Business Commissioner |
| Average amount owed in late payments per UK business affected by late payment. | £17,000 | Small Business Commissioner |
Source: UK Finance, GOV.UK, Small Business Commissioner
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### UK Fair Payment Code and Small Business Commissioner Statistics 2026: key figures | Metric | Value | Source | | --- | --- | --- | | Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance). | £20bn+ | UK Finance | | The Fair Payment Code launched, replacing the Prompt Payment Code. | December 2024 | Small Business Commissioner | | Signatories to the former Prompt Payment Code before its replacement. | 5,000+ | Small Business Commissioner | | Reapplication cycle for Fair Payment Code Gold, Silver and Bronze awards. | 2 years | Small Business Commissioner | | Recovered for small businesses by the Small Business Commissioner's dispute service since 2017. | £10m | Small Business Commissioner | | Recovered by the Small Business Commissioner in the 2025-26 financial year, the highest in over five years. | £1.5m | Small Business Commissioner | | Recovered by the Small Business Commissioner in December 2025 alone. | £500k+ | Small Business Commissioner | | Date mandatory 30-day payment terms took effect for tier 1 and 2 public sector supply chains under the Procurement Act 2023. | 24 Feb 2025 | GOV.UK | | Annual contract value threshold above which public bodies must run PPN 021 payment spot checks. | £5m | GOV.UK | | Minimum number randomly reviewed in each public sector payment spot check, at least every six months. | 10 invoices | GOV.UK | | Turnover, balance sheet and employee thresholds triggering the statutory duty to report on payment practices (a business meeting 2 or all 3 is in scope; thresholds raised from £36m and £18m on 6 April 2025). | £54m / £27m / 250 | GOV.UK | | Businesses that close each year because of late payments, across the UK economy (July 2025 research commissioned by the Department for Business and Trade). The same research estimates that late payment costs the economy almost £11bn a year. | 14,000 | Small Business Commissioner | | Average amount owed in late payments per UK business affected by late payment. | £17,000 | Small Business Commissioner | Source: UK Finance, GOV.UK, Small Business Commissioner
“The Small Business Commissioner's recovery figures cover only disputes referred to its free service, mostly smaller B2B invoice disagreements, so they understate total UK late payment losses rather than measuring them. Fair Payment Code signatory and award data reflect self-reported commitments reviewed periodically, not independently audited proof of every payment a firm makes.”
What the numbers mean
The Fair Payment Code replaced the Prompt Payment Code in December 2024, keeping the same voluntary basis but adding teeth the old code never had. Where the Prompt Payment Code let firms sign up once and stay listed indefinitely, more than 5,000 did, the Fair Payment Code requires reapplication every two years, tiers signatories into Gold, Silver and Bronze on actual payment performance, and gives the Small Business Commissioner power to review evidence and withdraw an award if a company falls short. Public sector buyers face a parallel tightening: 30-day payment terms became mandatory for tier 1 and tier 2 supply chains under the Procurement Act 2023 from 24 February 2025, and from 1 October 2025 contracts worth over £5m a year must allow spot checks of at least ten invoices every six months.
Enforcement is still catching up with the scale of the problem. The Small Business Commissioner's free dispute resolution service has recovered £10m for small firms since 2017, including £1.5m in the 2025-26 financial year, the highest in over five years, but research commissioned by the Department for Business and Trade and published by the Small Business Commissioner in July 2025 puts the annual cost of late payment at almost £11bn and links it to 14,000 business closures a year, with over 1.5 million businesses (28%) affected each year. Invoice finance sits alongside these codes and duties as the practical bridge: rather than waiting on a signatory's award tier or a spot check to change behaviour, a business releases cash against its unpaid invoices as soon as they are raised, funding operations while policy reform works through the system.
FAQs
What is the Fair Payment Code?
It is a UK government-backed code of practice, run by the Small Business Commissioner, that recognises businesses paying suppliers promptly and fairly. It launched in December 2024, replacing the Prompt Payment Code, and awards Gold, Silver or Bronze status based on actual payment performance rather than a one-off sign-up.
How is the Fair Payment Code different from the old Prompt Payment Code?
The Prompt Payment Code let firms register once and remain listed with little ongoing check. The Fair Payment Code requires reapplication every two years, is tiered by measured performance, and lets the Small Business Commissioner withdraw an award if a company's payment behaviour slips.
Does the Fair Payment Code apply to my business?
Signing up is voluntary for businesses of any size. Separately, large companies meeting two of three statutory thresholds (turnover over £54m, balance sheet over £27m, over 250 employees; in force since 6 April 2025) have a legal duty to report their payment practices twice a year regardless of whether they join the code.
What does the Small Business Commissioner actually do?
It runs a free, informal dispute resolution service for small businesses owed money by larger firms, administers the Fair Payment Code and its Register, and has recovered £10m for small businesses since 2017, including £1.5m in the 2025-26 financial year.
How does invoice finance help if a customer pays late anyway?
Invoice finance releases a percentage of an invoice's value soon after it is raised, rather than when the customer eventually pays. It does not stop late payment happening, but it removes the cash flow gap it creates while codes, spot checks and reporting duties work to change payer behaviour over time.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam was managing director of Penny, a UK invoice finance business, from July 2020 to November 2023. His career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library. Career record.
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