Currently, £23.4 billion worth of late invoices are owed to small firms across Britain, impacting on businesses’ cash flow and ultimate survival. On 1 October, to address the scourge of late payment, Small Business Minister Paul Scully announced proposals to ensure small businesses in the UK are paid on time.
The government is seeking to create a culture of prompt payment in UK business. This is essential to enable small businesses to succeed, creating jobs, driving innovation and supporting their community. According to the Federation of Small Businesses (FSB), around 50,000 small companies close each year due to late payments.
And when one considers that £23.4 billion worth of late payments are currently owed to small businesses in the UK, it is not surprising that something needs to be done.
Included in the proposals are:
The proposals, are part of a new consultation launched to look to give new powers to the Small Business Commissioner including:
In doing this, the government is seeking to create a culture of prompt payment in UK business. This is essential to enable small businesses to succeed, creating jobs, driving innovation and supporting their community.
Small Business Minister Paul Scully said:
“Late payments are a terrible burden for small businesses, not only disrupting their cash flow but posing a threat to their survival in many cases.
We are committed to tackling this problem, supporting small businesses at this critical time for the British economy by helping them to secure payment on time.
I am pleased to open this consultation on expanding the Commissioner’s powers and welcome the views of businesses that have been affected by this issue.”
This is a really positive initiative by the government – hopefully the seeds of the consultation will ripen and introduce an effective regime to address the late payment culture.
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