Govt tackles late payments to small businesses & makes large Co. Directors liable if >30 days
The Government is to strengthen the Prompt Payment Code, ensuring larger companies pay their suppliers on time:
- Required payment period to small businesses slashed in half to 30 days, with personal commitments to be made by Directors.
- An overhaul of the Prompt Payment Code to crack down on delayed invoices owed to small businesses has been announced by the government today (19 January).
Under new reforms, companies that have signed up to the Prompt Payment Code will pay small businesses within 30 days. Poor payment practices are still rife, with many payments delayed well beyond the current 60-day target required for 95% of invoices.
To help tackle the problem, businesses owners, Finance Directors or CEOs will be required to take personal responsibility by signing the Code, acknowledge that suppliers can charge interest on late invoices under the Code and that breaches will be investigated.
The government seeks to strengthen the powers of the Small Business Commissioner to ensure larger companies pay their smaller partners on time and include legally binding payment orders, launching investigations and levying fines.
By John Mather from EMC & Associates Ltd., 2 months ago.