Legislation forcing large companies to pay smaller businesses on time and ending excessive delays has been introduced to Parliament.
The Bill puts a 60-day cap on payment terms for large firms and mandatory interest on late payments, as well as action to ban the practice of retentions in construction.
The government said it was introducing the toughest action on late payments in a generation.
Minister for Small Business and Economic Transformation, Blair McDougall said: “I’ve spoken to too many business owners who do everything right and are still left lying awake at night wondering how they’ll pay their staff or cover their bills because they haven’t been paid what they’re owed.
“Introducing this Bill is about standing up for those people, to restore fairness, dignity and security for small business owners and the self-employed, so they can focus on doing what they do best: growing their businesses and the economy.”
The RHA welcomed the move and said late payments killed viable firms and dragged on the entire supply chain.
It pointed out that 400 hauliers went bust in 2025 and this year would have the knock-on impact of the war with Iran to consider.
“With margins low and rising cost considerations a daily reality, insolvency rates remain high with further businesses going into administration this week, and others recently going out of business,” said RHA MD Richard Smith.
“Companies across the road transport space are run by working people. Many are smaller, medium-sized firms, often family-owned and economic anchors in their communities.
“These businesses cannot afford additional cost burdens. If implemented and enforced effectively through continued dialogue with industry, these late payment plans could go some way to improving financial resilience.
“There’s much more to do, but this is a positive step,” he added.
