Business Secretary Peter Kyle will join LBC's Call the Cabinet on Tuesday with Nick Ferrari at Breakfast
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The toughest crackdown on late payments in more than 25 years is set to be launched in a bid to protect small businesses.
The issue is said to force more than 1,000 firms to close down in any given month, which costs the UK economy an estimated £11 billion a year.
The Government has pledged that small companies, including tradespeople, freelancers and the self-employed, will be paid on time due to reforms creating the strongest laws on late payments in the G7 group of nations.
The measures will see the worst offenders fined, with penalties which could amount to tens of millions of pounds for persistent later payers or those that fail to comply with the new laws.
It added the reforms will go further than previous governments on the issue by strengthening legislation laid out in the 1998 Late Payment of Commercial Debt Act.
Business Secretary Peter Kyle, who will join LBC's Call the Cabinet on Tuesday with Nick Ferrari at Breakfast, said: "Far too many businesses are forced to shut down because they have not been paid – that is simply unacceptable.
"We are unveiling the strongest, most robust changes to payment laws in over a generation, laws that will transform the fortunes of small businesses for years to come and make their day-to-day lives much easier."
The changes would set out a new 60-day cap on payment terms on all large firms when paying smaller suppliers.
A new level of mandatory interest on late payments will be introduced, with a requirement for all commercial contracts to include a statutory rate set at 8 per cent above the Bank of England base rate.
This means a small businesses owed £10,000 and paid 60 days later than the agreed date would be owed £10,293.15, including the mandatory interest plus £100 compensation.
Small business minister Blair McDougall described the new measures as "genuinely game-changing".
Mr McDougall said: "I know first-hand how difficult late payments can be, forcing you to decide if you can afford to keep a business running, pay employees or even buy Christmas presents for your children.
"That is why I’m proud to be leading the charge on tackling a problem that has been left untouched for far too long.
"These are genuinely game-changing measures that will ensure no business, no employer, no family has to endure the immense strain of being left strapped for cash they have already earned."
Small business commissioner Emma Jones added: "We are on a mission to make life easier for small firms by getting money moving faster through the economy by tackling late payments.
"The measures the Government has announced today will strengthen the role of my office in taking on the worst payers alongside ensuring small businesses have a stronger voice on payment terms and late payment interest."
"These reforms will reduce the hours spent chasing debt allowing small businesses to focus on more productive and enjoyable growth".
