The move comes as regulations are laid in parliament confirming that from April all large companies will have to publically report twice a year on their payment practices and performance – including the average time taken to pay supplier invoices.

Failure to report will be a criminal offence.

Small Business Minister Margot James said: “It’s completely unacceptable that small and medium-sized businesses are owed £26.3 billion in late payments, which hampers their ability to grow and has no place in an economy that works for all.

“Large businesses have an important role to play and the guidance published today will help them fulfil their responsibilities and improve payment practices across the board.”

The new laws will apply to all firms with a turnover above £36m or employing more than 250 people.

Mike Cherry, National Chairman at the Federation of Small Businesses, said: “The new duty to report is the centrepiece of the government’s transparency agenda to combat poor payment practice.

“We welcome this as an important tool to change a UK business culture where it is deemed acceptable to pay small firms late.

“We estimate that if payments were made promptly, 50,000 business deaths could be avoided every year, adding £2.5 billion to the UK economy.”