Business Secretary Greg Clark has promised a series of new measures to back businesses and entrepreneurs, support workers and ensure the country benefits from the government’s modern Industrial Strategy.
The UK’s smaller sized businesses will certainly be pleased to learn the government has made a commitment to end the unfair treatment of SMEs by companies who abuse their position by paying late for products and services.
The government aims to strengthen the Prompt Payment Code with a new tough and transparent compliance regime.
A call for evidence will be published, which will consider the best way to ensure company boards put in place responsible payment practices throughout their supply chain – including whether all company boards should give one of their non-executive directors’ specific responsibilities for the company’s prompt payment performance.
The Small Business Commissioner will join the Prompt Payment Code’s Compliance Board to support his role in tackling late payment.
Federation of Small Businesses (FSB) National Chairman Mike Cherry welcomes the announcement. He said, “Late payment is the biggest challenge affecting small businesses and it is good to see the Government getting serious about this issue.
“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 also right as that 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.”
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