Company boards will now be held accountable for payment practices to small businesses within their companies in a drive to increase transparency and accountability on late payments.
The government will consult on strengthening the powers of the Small Business Commissioner to hold to account larger businesses who fail to make payments on time.
New powers could include compelling information and disclosure of payment terms and practices, imposing financial penalties or binding payment plans on large businesses found to have unfair payment practices.
Responsibility of the voluntary code of best practice – the Prompt Payment Code – will now be moved to the Small Business Commissioner – this will put tools to tackle late payment under one organisation, ensuring the Commissioner has the powers to affect culture change in unfair payment practices.
Small Business Minister Kelly Tolhurst, said, “The vast majority of businesses pay their bills on time, with the amount owed in late payments halved over the last five years. But as a former small business owner, I know the huge impact a late payment can have on the ability of a small business to plan, invest and grow.
“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. 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.”