The code, overseen by the Small Business Commissioner Liz Barclay, introduces a gold, silver, and bronze system to reward best payment practices and help smaller firms identify reliable and trusted partners.

Main contractors can now sign-up here.

The new Fair Payment Code replaces the Prompt Payment Code which has been operational since 2008.

The government said: “The new Code will 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. There will also be a more rigorous application process, a two-year limit on awards and a more robust approach to enforcement.”

Liz Barclay, Small Business Commissioner said: “The Fair Payment Code is our response to all those suppliers who begged for a more aspirational, robust and ambitious approach to changing the business to business payment culture in the UK. It also gives a clear signal of intent on the part of Government.

“We want suppliers paid within 30 days with payment beyond the due date a rare event. We want longer contractual payment terms to be recognised as potentially detrimental to vital supply chains. We want businesses of all sizes to commit to fair and quick payments and to avoid harmful disputes. This new Code will drive a better payments culture and benefit everyone.”