UK Ransomware-Payment Ban 2025: What SMEs Should Do Now

Ransomware remains the UK’s most serious cyber threat. In July 2025, the Home Office set out proposals to ban ransom payments for public-sector bodies and operators of regulated critical national infrastructure (CNI) and to introduce wider reporting/payment-prevention measures for everyone else. The government’s consultation response shows strong support (around 72% in favour of a targeted ban), and ministers say they’ll press ahead. While legislation isn’t passed yet, the direction of travel is clear, and SMEs should prepare now. See the government Consultation Outcome and the Written Ministerial Statement for details.

What’s actually changing?

–  Targeted ban: Paying ransoms would be prohibited for public bodies (e.g. councils, NHS trusts) and regulated CNI operators. 

–  Economy-wide “payment-prevention” option: For organisations outside the ban, policymakers have explored a regime where a victim must notify authorities before paying so checks/advice can be given (e.g. sanctions risks). This isn’t final law, but it’s on the table in the Consultation Documents/Outcome.

–  Mandatory incident reporting: The package also includes proposals to increase ransomware-incident reporting so law enforcement and the NCSC can disrupt criminals more effectively. (See the Consultation Outcome.)

Why it matters if you’re not in scope of the ban: Even if you’re a private-sector SME, you’ll face higher expectations around governance, reporting and decision-making. Boards should view this as an opportunity to formalise incident response, backups, and supplier obligations, aligning with the government’s Cyber Governance Code of Practice.

Immediate implications for UK SMEs

–  Board accountability: Directors are expected to oversee cyber risk just like finance and health & safety, start with the Cyber Governance Code of Practice.

–  Reporting readiness: If a ransomware incident causes a personal data breach, you may need to notify the ICO within 72 hours and, in some cases, inform affected individuals. Build this into your playbook now (see the ICO’s guidance Personal Data Breaches: A Guide)

–  Law-enforcement engagement: Know where and how to report a cyber incident, use NCSC’s reporting portal, the GOV.UK “Where to report a cyber incident” Guide, and Action Fraud for suspected fraud.

–  Sanctions checks: Payments can violate UK sanctions, another reason the government is considering pre-payment notification for those not under the ban (see the Consultation Documents/Outcome). Ensure legal counsel can assess sanctions exposure quickly.

Your 8-step readiness checklist

1. Update your Incident Response plan

– Define decision authority (who can declare; who can authorise outside counsel/forensics).

– Add a pre-payment legal/sanctions review step (even if your stance is “we don’t pay”).

2. Backups & BCDR that actually work

– 3-2-1 with offline/immutable copies, frequent restore tests, and recovery time objectives aligned to the business.

3. Endpoint & identity hardening

– EDR/MDR, MFA everywhere, conditional access, local admin lock-down, and rapid patch SLAs.

4. Privilege & lateral-movement controls

– PAM or just-in-time admin, network segmentation, and service-account secrets management.

5. Email & web controls

– Phishing protection, attachment sandboxing, DNS filtering, and browser isolation for high-risk roles.

6. Table-top exercises

– Run a ransomware drill with execs, IT, comms, legal and a supplier. Practise the first 24 hours.

7. Supplier clauses

– Require suppliers to tell you quickly about ransomware incidents and to align with UK reporting obligations; check their backup/MDR posture.

8. Breach-reporting muscle memory

– Pre-fill ICO forms (templates), define “risk to individuals” triage, and rehearse lines of communication to NCSC /Action Fraud.

FAQs we’re hearing from clients

Will a ban end ransomware?

No – law can end it, but the goal is to disrupt the business model (reduce payouts, improve intelligence). That’s why the government is combining bans (for public/CNI) with better reporting and prevention, see the Consultation Outcome for context.

Do we have to report every incident to the ICO?

No – only if a personal data breach meets the UK GDPR threshold. But you must have a process to decide quickly and document why if you don’t report. Start with the ICO’s 72-hour Guidance and Personal Data Breach Guide.

Where do we actually report a cyber incident?

Use GOV.UK’s “Where to report a cyber incident”, the NCSC portal, and Action Fraud.

How 4th Platform can help

– Incident response planning & readiness: Review your playbook against UK guidance and ICO reporting expectations; tighten roles, comms, and decision paths. 

– Backup & recovery -design: Immutable/offline backups with tested recovery to keep the business running.

– Managed security with EDR/MDR: Continuous detection and response tuned to ransomware behaviours.

– Board briefings & table-top exercises: Executive sessions aligned to the Cyber Governance Code of Practice; practise the first 24 hours.

Ready to tighten your ransomware readiness? Our team can review your incident plan, stress-test backups and tune your detection to current UK guidance, contact us today to get started!