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Call for evidence to combat late payments to small businesses

Posted: 21st November 2018   In: Debt Collection Services

The government is urging businesses to highlight their experiences of late payment and put forward ideas to ensure earlier settlement, especially by large companies.

One in four UK businesses say that late payments are a threat to their survival. Research by the Federation of Small Businesses suggests that prompt payments could add £2.5 billion to the UK economy and keep an extra 50,000 businesses open each year.

The call for evidence seeks views on:

The publication of the new call for evidence follows the announcement that the Small Business Commissioner is to join the Prompt Payment Code’s Compliance Board to support his role in tackling late payment.

The Federation of Small Businesses (FSB) National Chairman, Mike Cherry, said: “The voluntary Prompt Payment Code is not working when it allows signatories like Carillion to pay on terms of over 120 days, so we want to see a new tough and transparent compliance regime being proposed.

“Involving the Small Business Commissioner Paul Uppal with the code is right as it shows a more joined-up approach to this difficult issue. Further, it is a positive step that central government will set an example – paying 90% of undisputed invoices from small and medium-sized businesses within five days.

Small Business Commissioner Paul Uppal said: “Some large businesses use late payments and extended payment terms to exert control over small businesses in their supply chain, and the government will now seek the views of the UK business community on how best to ensure small businesses are given a fair deal.”

The call for evidence is open until 29 November 2018 and the government is encouraging, businesses, trade associations and other interested parties such as academics to contribute their views to it.

Respond to the call for evidence

Please contact Neil O'Callaghan if you would like help with debt collection and credit control.

 

Posted by: Neil O'Callaghan
Dispute Resolution
Luton Office