Written by: Keith Tully
Reviewed: Friday 21st June, 2019
The government has announced plans that should soon see large companies being fined for failing to pay their smaller scale suppliers in a timely fashion.
Small business minister Kelly Tolhurst has announced a series of ideas that are being billed as a “robust package of measures” designed to help ensure that Britain’s SMEs get paid more promptly than is currently the case.
Lobby groups have long been making the case to government that SMEs suffer serious financial challenges as a result of larger companies failing to make payments to them on time.
Now the Department for Business, Energy & Industrial Strategy has said it could give a Small Business Commissioner powers to fine big companies for late payments and legally oblige them to adhere to pre-agreed payment plans.
It’s also been made clear that boards of big companies will soon be held responsible if it can be shown that they routinely leave suppliers within their supply chains unpaid for long periods.
Part of the plan is also to force audit committees to incorporate details of a company’s payment practices and performance regarding late payments within official annual reports.
“Small businesses are the backbone of our economy and through our modern industrial strategy we want to ensure the UK is the best place to start and grow a business,” said Ms Tolhurst, as she announced details of the government’s plans and proposals.
“These measures will ensure that small businesses are given the support they need and ensure that they get paid quickly - ending the unacceptable culture of late payment,” she said.
A new fund has also been created to encourage businesses to take advantage of technologies that can help them to simplify their invoicing, payments and credit management processes.
Mike Cherry, national chairman of the Federation of Small Businesses (FSB), has warmly welcomed the government’s announcements on the issue.
“FSB has worked very hard with government to create a whole-board approach to late payment within the UK’s large companies, and empower audit committees to look after the supply chain,” he said.
“The measures [announced] today could finally see an end to poor payment practice,” he added.
18th July 2019
The UK economy is likely to be plunged into recession in the aftermath of a No Deal Brexit, according to the Office for Budget Responsibility (OBR).Read More
9th July 2019
British Airways (BA) is facing the prospect of being fined more than £183 million for failures in relation to data protection laws.Read More