New Fair Payment Code Goes Live to Drive Improvements in Payment Performance

• The new Fair Payment Code has a tiered system of Awards which is aimed at awarding best practice and driving improvements in payment performance.  
• The Fair Payment Code introduces Gold, Silver and Bronze tiered Award categories underpinned by fair payment principles. 
• The Fair Payment Code replaces the Prompt Payment Code. It aims to be more ambitious, aspirational and robust. 

Healthy cash flow is critical for small business survival and growth. Late and long payment times disrupt the cash flow cycle and can prevent a business from paying its bills, eventually leading to business failure. In 2023 15% of small businesses and medium sized enterprises cited cash flow and late payments as an obstacle to running their businesses.

The new Fair Payment Code has been launched to encourage businesses across the UK to pay promptly. Businesses may now apply for the Award tier which best suits them: Gold, Sliver or Bronze. The tiered system of Awards is aimed at awarding best practice and driving improvements in payment performance. The three Award tiers 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. 

The new Fair Payment Code replaces the Prompt Payment Code. It aims to be more aspirational by supporting businesses which wish to improve payment practices and helping them move up from Bronze to Silver, and to Gold over time.   

The Fair Payment Code Awards are for two years, and every business will need to reapply for their Award at the end of each two-year period. There will also be a complaint system in place for businesses to highlight to the OSBC those not meeting the requirements of the category of their Award (Gold, Silver or Bronze) or not following the principles of the Code. 

Businesses can now apply of any Award level of the new Fair Payment Code.