The UK government has unveiled a new Small Business Strategy, which aims to prioritise business advice and support, clamp down on late payments through stricter penalties, cut red tape and revive high streets – offering major opportunities for small businesses and the chartered accountants who are trusted business advisers to those small businesses.

Within this new package, the UK is set to introduce the toughest anti-late payment laws in the G7, addressing a crisis that costs the economy £11bn a year and leads to the closure of 38 businesses every day.

Prime Minister Keir Starmer underlined the urgency of the reforms: “Too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses. It’s unfair, it’s exhausting and it’s holding Britain back. So our message is clear: it’s time to pay up.”

Key reforms

• Cracking down on late payments
  Reforms include:
• Mandatory interest on overdue invoices
• Spot checks and enforcement powers for the Small Business Commissioner
• Maximum payment terms of 60 days, reducing to 45
• Audit committees legally required to scrutinise payment practices at board level
• Unlocking growth finance
  A £4bn funding package will support start-ups and scale-ups through:
• 69,000 Start-Up Loans with mentoring support
• A £3bn boost to the British Business Bank’s ENABLE programme, improving access to affordable loans for small firms
• Revitalising high streets
  New hospitality zones, planning reforms, and high street rental auctions will turn vacant shops into hubs for cafés, pop-ups and local businesses, supporting community regeneration.
• Simplifying access to support
  A new Business Growth Service, accessed via business.gov.uk, will act as a single digital gateway for advice, funding and export support, replacing a patchwork of disconnected platforms.
• Boosting skills and digital innovation
  Targeted upskilling and technology adoption initiatives will help small firms stay competitive and resilient in a changing economy.

Backing the backbone of the economy

“Small businesses are the backbone of the UK economy, making up 99% of all businesses, employing two-fifths of the private sector workforce and generating more than half of the UK’s business turnover,” says Alan Vallance, ICAEW Chief Executive. “It is vital they can operate in an environment that helps them grow and thrive.”

The plan aligns with the UK’s Industrial and Trade Strategies and forms part of the wider Plan for Change, designed to deliver long-term stability, investment and productivity.

Small Business Minister Gareth Thomas emphasises the government’s commitment: “I want the UK to be the best place in the world to start a business, grow and succeed. Too many small firms go under each year because they are not paid on time – that is completely unacceptable. The Plan for Change is the government listening to businesses, working with them and delivering real change.”

Chartered accountants: turning policy into progress

For the accountancy profession and the millions of small businesses it supports, the implications are wide-reaching. The plan introduces major reforms designed to create a fairer, more supportive environment for small firms to start, grow and succeed.

“Chartered accountants are central to this story,” says Vallance. “They not only advise clients across all sectors, but bring lived experience of running small firms themselves. The publication of the Small Business Strategy is an important step in enabling small businesses to realise their potential, and accountants will be instrumental in its success.”

ICAEW is encouraging its members to engage actively with the Small Business Plan, helping clients adapt to the changes, access support and contribute to the UK’s long-term economic growth.

Business and Trade Secretary Jonathan Reynolds notes: “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.”

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