ACCA welcomes the opportunity to respond to the Department for Business and Trade (“DBT”) on Late payments consultation: tackling poor payment practices.

ACCA has a significant interest in the business ecosystem with our network of members working in either public sector, financial services, business or in practices supporting SME clients. Adequate cashflow is a fundamental feature of a healthy business ecosystem and is key for growth. We are acutely aware of the challenges faced by businesses in this area and welcome the opportunity to share insights from our members.

Following consideration of the relevant questions we would note the following observations:

• ACCA support the government's proposal to increase transparency of large companies’ payment practices at audit committee level creating collective responsibility. Where an audit committee does not exist delegating reporting on late payment practices to a Responsible Individual (RI) (a well-recognised designation) could be an appropriate and feasible alternative.
• While we support proposals to introduce a maximum payment term of 60 days for UK businesses, we strongly recommend implementing this on an ‘comply or explain’ basis. This is a more pragmatic approach as exceptions will be inevitable. Such an approach will help mitigate against any negative perceptions of the business environment that may be created if no allowances were made for those inevitable exceptions while still ensuring business suppliers are fully informed before entering contracts.
• ACCA also support the proposal to limit a dispute window to 30 days however clarity is needed as to when the 30-day window commences. We also recommend this reform is implemented on a ‘comply or explain basis’.
• ACCA continue to be fully supportive of increasing the powers of the Small Business Commissioner (“SBC”) as it is clear change is needed to tackle the late payment issue. However, we would caution that any additional powers must be matched with adequate resourcing. In anticipation of resourcing needed adopting the “Pollute Pays Principle” (“PPP”), where persistent late payers bear the costs of any investigative work of the SBC, could be of benefit.
• While we understand the proposal for implementing mandatory statutory interest we do not support the implementation of the proposal at this time. We believe the other reforms, including additional powers for the SBC should first be implemented and a post implementation review completed. Any such a reform being the next step if adequate progress has not been made.
• We believe retention clauses in construction contracts have a valid purpose allowing for mitigation against issues with construction work however to be effective clauses must be fair and proportionate. We suggest the government leads by example in this regard.
• Finally, our global quarterly survey of economic conditions, completed in partnership with the Institute of Management Accountants, with data gathered between 2-16 September 2025. The UK SME sample from Q3 2025 show a staggering 35.6% of UK SMEs reported problems with securing prompt payment. The results also indicated worsening economic conditions, with falls in key measures including confidence, capital expenditure and employment. Undoubtedly the impact of late payments is a key factor in the results reported stifling cashflow and growth.
• We believe that business confidence would be improved by the commitment to review and simplification, with the creation of a framework for the systematic review and phased implementation of changes to the tax system. This is critical to creating a business environment that nurtures growth, and to prevent any further compounding of unintended consequences of tax policy, into the future.

To read our comments in full, please download the document found on this page.