For contractors in the UK construction industry, strong payment performance is no longer just a regulatory obligation - it is a powerful competitive advantage.
At the heart of this shift is the new Fair Payment Code and its gold award, the highest recognition for ethical and responsible payment practices. Achieving gold signals to public and private sector clients that a contractor is committed to financial transparency, supply chain stability, and timely supplier payments, setting them apart in competitive tenders.
The introduction of the new Fair Payment Code is redefining best practices in construction finance, with its gold, silver, and bronze award levels distinguishing organisations based on their payment performance. Organisations that prioritise streamlining financial workflows, adopting digital receipting solutions, and integrating automated payment systems will be best positioned to attain gold award status, unlocking long-term business growth.
What is the Fair Payment Code?
Since its launch, the Fair Payment Code has become a key initiative in the UK government’s efforts to combat late payments and improve supply chain transparency across industries.
Replacing the Prompt Payment Code (PPC), the Fair Payment Code establishes stricter standards to ensure suppliers are paid on time, addressing a long-standing issue in sectors like construction, where payment delays have historically disrupted projects, strained subcontractor relationships, and created financial instability.
The Fair Payment Code introduces a three-tiered award system that recognises businesses based on their ability to pay suppliers within a set timeframe, which is highlighted below.
For more information on the Fair Payment Code, its awards and how it differs to the Prompt Payment Code (PPC) read our the new Fair Payment Code explained article here.
Why should construction contractors strive for the Fair Payment Code Gold Award?
While achieving the bronze or silver awards demonstrates compliance, only those construction contractors reaching the Fair Payment Code Gold Award standard can truly differentiate themselves in public and private sector tenders.
The Fair Payment Code gold award is the highest recognition under the new Fair Payment Code, requiring 95% of all invoices to be paid within 30 days. In contrast, silver and bronze only require this for certain suppliers or allow a longer 60-day payment window.
With Government procurement policies placing increasing emphasis on prompt payment, financial responsibility, and supply chain fairness, organisations that fail to meet high payment performance standards risk losing valuable contracts and supplier relationships.
Contracts are increasingly linked to ethical and responsible business practices. Under the Public Procurement Notice (PPN) 10/23, companies bidding for public contracts over £5 million must prove they pay at least 95% of invoices within 60 days, and all invoices within an average of 55 days (reducing to 45 days from 1 October 2025). Failure to meet this benchmark can result in disqualification from tendering opportunities.
For contractors looking to win more bids, strengthen supplier partnerships, and stand out in the construction industry, striving for the gold award should be the ultimate goal.
How to leverage gold award status for a true competitive advantage
Contractors that achieve the Fair Payment Code Gold Award can gain a significant competitive edge over those that settle for bronze or silver, or do not apply for the code at all.
Government and private sector clients are increasingly looking to work with contractors that prioritise fair payment and maintain financial responsibility. Additionally, there are other core advantages to gain from achieving the gold award, which are set out below.
Stronger government tender eligibility
The Government has made it clear that ethical financial practices are a key factor in awarding public sector tenders and contracts. Poor payment performance isn’t just an inconvenience for the whole construction supply chain, it undermines the construction industry’s stability, increases project risk, can delay a project's completion and harm a company’s reputation.
Under the Government's Prompt Payment Policy (PPC), when bidding for contracts over £5 million, suppliers will be required to prove they pay at least 95% of invoices within 60 days (from 1st October 2025, the average time to pay invoices will decrease from 55 to 45 days).
The Fair Payment Code Gold Award exceeds this standard.
While others may settle for just achieving this requirement, contractors will be more attractive to public sector buyers by going above and beyond the minimum requirement, increasing their chances of winning larger public tenders.
The Government wants to work with businesses that treat their suppliers fairly. Fair payment practices demonstrate financial stability and responsible leadership. When a contractor delays payments to suppliers and subcontractors, it creates a domino effect that leads to delayed wages, cash flow issues, and, in extreme cases, insolvencies. To provide some context, there are currently 4,000+ yearly insolvency cases within UK construction.
Enhanced reputation with private clients and investors
The Fair Payment Code promotes best practices in payment performance, ensuring contractors pay their supply chain promptly and fairly. While the Fair Payment Code isn’t mandatory, adherence to its principles demonstrates financial responsibility and strengthens a company’s reputation.
Fair payment practices aren’t just a concern for public contracts, private sector clients also prioritise working with financially responsible organisations. Achieving the highest standard, the Fair Payment Code Gold Award demonstrates ethical financial leadership, making businesses more desirable to developers, investors, and commercial clients.
The Fair Payment Code isn’t just a set of best practices, it is a strategic tool that enhances credibility and strengthens financial performance. Contractors that commit to fair and prompt payments benefit from stronger supplier relationships, a better industry reputation, and improved private sector procurement eligibility, as well as enhancing their reputation.
Stronger supplier and subcontractor relationships
Suppliers and subcontractors prefer working with organisations that pay on time.
By achieving the Fair Payment Code Gold Award, the industry's largest contractors can improve confidence levels through social proof, attract top-tier suppliers, and gain better pricing and service terms by developing trust through their payment practices. This gives them a competitive edge over organisations with poor payment track records.
Reduced project delays and legal disputes
Payment disputes are a leading cause of project delays and financial disputes in construction.
By ensuring that invoices are processed quickly and transparently, organisations minimise legal risks and maintain smoother project workflows, with projects that are completed on time benefiting a company at a financial level and making a positive contribution to the wider construction industry.
Improved cash flow and financial stability
Maintaining good payment performance helps organisations avoid financial bottlenecks, plan project budgets effectively, and improve overall cash flow, essential for organisation stability and long-term business growth. Adopting payment best practices that not only meet regulatory requirements but exceed them, can enhance cash flow, build supplier trust, strengthen supply chain relationships and maintain an overall financially healthy position.
The importance of gold is clear
The introduction of the Fair Payment Code marks a pivotal shift in the construction industry, transforming payment practices from mere regulatory compliance into a strategic business advantage. The Fair Payment Code Gold Award represents more than an accolade - it signifies a contractor's commitment to financial transparency, ethical practices, and supplier stability.
Forward-thinking construction contractors will recognise that achieving Gold Award status isn't merely about regulatory compliance, it delivers strategic advantages in securing Government tenders, attracting better suppliers, and building stronger client relationships.
As construction transitions toward this new payment culture, with expectations that 30-day terms could become standard in future regulations, the time to adapt is now. Contractors who delay implementation risk damaged reputation, limited business opportunities, and potential financial penalties. The Fair Payment Code isn't just changing how construction businesses pay, it's redefining what it means to be a trusted and viable contractor in the industry.
A path to achieving gold status
Striving for the Fair Payment Code Gold Award requires proactive financial management and the adoption of best practices in receipting, invoicing, and supplier payments.
Implement automated receipting and payment tracking
Ensure compliance with three-way matching solutions
Communicate payment terms clearly
Monitor and audit payment performance regularly
For a deeper understanding of how the Fair Payment Code specifically impacts the construction industry, read our in-depth analysis: the Fair Payment Code explained: what it means for construction.
