SMEs call for costs and late payment action

With ONS findings showing GDP only rose slightly in the three months to April, small businesses are urging the government for action on late payments and costs.

Commenting on the recent ONS data, Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), said, “GDP growth in April comes after a tough winter, and will bring some measure of hope to small firms.

“The three-month picture, meanwhile, doesn’t offer much to shout about, only just lifting above zero – although growth of any kind is of course good news.

“If the Government wants to give small firms a lift, one revenue-neutral measure which would have an immediate effect would be to tackle late payment, to get funds flowing through supply chains.”

Tina added, “Making large corporates publicly responsible for the payment practices in their supply chains would give immediate relief to millions of small firms, and save them time and effort currently spent chasing invoices, improving their productivity.

“Inflation fell in the most recent figures but is still some distance higher than the 2% target, while elevated prices are proving sticky. With consumer confidence rising but still firmly negative, many small firms are in a precarious position.

“Cutting their fixed costs – by looking at business rates, increasing the VAT threshold, and ensuring that small businesses trapped on high energy tariffs can ‘blend and extend’ their contracts – will relieve margin pressure, and encourage small firms to fulfil their true potential as the engine of recovery.”

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