Levelling the paying field

By Emma Peterson. 

A recent government decision to reform payment law is set up to help small businesses thrive.  

In the U.K. government’s recently decision about retention in construction contracts, they also made key changes to reform long-standing payment laws. To get a better understanding of what the payment law reform will look like, Heidi J. Ellsworth hosted James Talman, the CEO of National Federation of Roofing Contractors (NFRC), for an episode of Roofing Road Trips®. 

At the heart of the payment law reform are four major changes:  

• A new maximum 60-day payment term 
• A statutory deadline for invoice disputes to be raised 
• Interest on late payments, set 8% above the Bank of England’s base rate, is mandatory 
• A requirement of a public explanation of persistent poor payment performance and a plan for resolving the issue 

These changes are all designed to support the small businesses that the entire roofing and construction trades are built upon. James explained, “It's ultimately small business that builds large business. So, this legislation, with things like the new 60-day cap on payment terms for large firms paying small suppliers, is going to be great for the small businesses and ultimately build a stronger industry.”  

And it’s not just the roofing industry that will be made stronger by this reform. James explained, “This bill goes beyond just construction. Currently, these payment issues cost over 11 billion pounds per annum for small businesses. And then there's 38 small businesses close every single day in the UK because of money issues. These numbers are the equivalent of 266 small businesses closing every week and over a thousand pounds a month. So, these law reforms are crucial to not only construction, but to helping our entire economy.”  

Check out the rest of the podcast to learn more!