The government is set to tackle late payments to businesses with significant legislative reforms.

Late payments cost the UK economy £11 billion a year and shut down 38 businesses every day, according to the government.

The new laws are set to give stronger powers to the Small Business Commissioner to empower them to wield fines, worth potentially millions of pounds, against the biggest firms who persistently choose to pay their suppliers late.

Following the legislation, the UK will have the toughest late payments laws in the G7, the government added.

The legislation is part of reforms to back small businesses and unlock growth as part of the Plan for Change.

Business and Trade Secretary Jonathan Reynolds said: 

'This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best - growing our local economies.

'Our Small Business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs the financial backing they need.

'This is our Plan for Change in action, putting more money in people's pockets, boosting local communities and ensuring Britain is a great place to do business and thrive.'

Internet link: GOV.UK