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Government refreshes plans for tougher late payment laws


A new government release has reiterated its commitment to introduce the long-awaited tougher payment reporting laws, now due to take effect from April 2017.

The report follows the fourth annual Small Business Saturday – a grassroots, independent and not-for-profit initiative championing small business in the UK – and states how a number of steps will be taken to eliminate late payment culture from large businesses to their suppliers.
It includes a requirement for large businesses to publish details twice a year on the average time taken to pay supplier invoices.

Having been hotly anticipated for a while now, after initially being planned to come into effect in April 2016, small business owners should be pleased to hear this is still going ahead and firmly at the forefront of government plans for the new year.

The measures also include:

Small Business Minister Margot James has said:

“This government will be celebrating the UK’s record number of small businesses, which are creating jobs and supporting local communities. Unfair payment practices and unnecessary red tape hamper their ability to grow; and by shining a light on how large businesses pay their smaller suppliers, we want to empower SMEs and drive a real change in payment culture.”

The government is due to release a guidance document on how to comply with the duty to report early in 2017, to assist with large business preparation.

Mike Cherry, National Chairman of the Federation of Small Businesses, spoke of the importance of this move:

“The comprehensive and regular duty to report is the first step to combat a business culture that feels like one where it is OK to pay small firms late.

“It is not OK – we estimate that 50,000 business deaths could be avoided every year, if only payments were made promptly – adding £2.5 billion to the UK economy. We need to see executive board level engagement and scrutiny of payment practices to deliver lasting cultural change.”

These changes will undoubtedly be welcomed by UK SME owners, but questions will remain over why it has taken so long to implement having first been announced in March 2015.

We’d like to hear your views on this. Do you think it’s a good move by the government, and will the reporting help you to make an educated decision over who you provide your goods and services to? Please share your views in the comments section below.



James Rodgers

15/12/2016 (10:36am)

To Mark above. All public sector organisations have well resourced HR & Finance departments and they know exactly what their obligations are. They are simply putting you to the bottom of the pile! See below my suggested solution. To Chris above. Do not fear any customer - it's your money as you have carried out the work and they do not dispute this. Two years is far too long. What can you do if your client goes under tomorrow? A lot of agro and you will be lucky to get a few pence per pound! Your business is at risk if people do not pay. My suggestion. You need to let your customers know your terms of payment and have an effective and quick way of getting your money, should they not pay as per agreed terms. I use an on-line debt collection service and it's quick and effective.

Mark Cerrone

15/12/2016 (09:56am)

If the government had simply advertised the existence of the Late Payment of commercial Debts Act on national TV in a similar way to the auto enrolment adverts maybe the "financial controllers" of larger companies, hospitals and universities would wake up to the fact they are operating outside UK law. It would not come as such a surprise when you point it out to them and would make it less easy to brush you off. I am not far off retirement and I look forward to suing everyone that has paid me late over the last six years as a new hobby. Or maybe using Hilton-Baird while sitting on a beach somewhere!

Chris Palmer

15/12/2016 (09:17am)

Long overdue, and likely to be inadequate, perhaps I should be reassured that at lease somebody is doing something, but far too little far too late, we employ 6 members of staff and operate over the south west providing a service to small, medium and very large customers: our larger customers have unpaid invoices outstanding for over two years and in some instances three years; yes we can challenge them legally and likely win, but this would destroy our ongoing relationship with that customer and worse be ostracised by the entire industry if it became public that we had taken a national house builder to court, after which we would almost certainly have to close our business down!!! my thought FAR TOO LITTLE - FAR TOO LATE!

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