Majority of MPs support Prompt Payment reform

In a new poll commissioned by AAT, MPs have shown overwhelming support for a reform that will change the way that big businesses pay SMEs in the UK.

As many as 73% of MPs agree with the three changes AAT recommends to be made to the Prompt Payment Code in order for smaller sized businesses to be paid on time:

1. Be made compulsory for companies employing more the 250 employees
2. See maximum payment terms halved from 60 to 30 days
3. Be supported by a clear, simple financial penalty regime for persistent late payers, enforced by the Small Business Commissioner.

These recommendations have been backed by the recruitment and construction industries, SMEs and most recently the Business, Energy & Industrial Strategy Committee.

Phil Hall, AAT Head of Public Affairs & Public Policy, commented, “Late payments lead to thousands of insolvencies every year, damage productivity, restrict investment and can also impact on the mental health of small business owners and their employees.

“Government action to tackle this problem, from the voluntary payment code to compulsory but feeble reporting requirements – as well as the creation of a Small Business Commissioner with no real power – have all predictably failed to stem the scourge of late payments.

“With almost three quarters of MPs from across the political divide supporting AAT’s recommendations for payment reform, it’s very difficult for the Government to continue to drag their heels and back the status quo. We trust that the Small Business Minister will bear these facts in mind when she considers what to do next.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.