The UK government is introducing rules to crack down on late payments to small businesses, including freelancers, family firms and the self-employed.

Under the new rules, payment terms must not allow more than 60 days for large firms to pay small businesses.

New mandatory interest of 8% above the Bank of England rate will be introduced for all late payments.

A small business that is owed £10,000 by one of its customers would then receive £10,293.15 if it’s paid too late.

The government says the new rules will “ease the cost of living for entrepreneurs and SME owners”, noting some 38 businesses shut their doors every single day because they are not paid on time.