This government is committed to tackling the scourge of late payments, which costs the UK economy almost £11 billion per year and closes down 38 UK businesses every day.
Over 1.5 million businesses are affected by late payments. This represents a significant drag on UK growth and productivity. A healthy cash flow is critical for the survival and growth of the UK’s small businesses. Paying hard-working employees, settling bills with other businesses, and investing in new capital, skills and ideas for the future – all of this relies on timely and fair payment.
Late payments can disrupt cash flows, prevent businesses from paying their bills, and even lead to business closures. Small and medium-sized enterprises (SMEs) are especially exposed to these issues, as they often have less cash in reserve to act as a buffer.
The Department for Business and Trade (DBT) is publishing this consultation which seeks views on a package of legislative measures aimed at addressing late payments, and ensuring businesses are paid fairly and on time.
Late payment is characterised by 4 different but inter-related problems, and the proposed measures aim to address them all. The problems the measures aim to address are:
- late payments. Where businesses fail to pay an invoice within agreed payment terms (30 days where no specific terms have been agreed).
- long payment terms. Where payment terms are agreed over extended periods, beyond 60 days.
- disputed payments. Where businesses disagree over the goods or services supplied and payment is delayed or reduced.
- unfair practice around retention payments. Specific to the construction sector, where retained money can be lost through upstream insolvency or subject to late, partial or non-payment.
DBT are seeking views from businesses, trade representatives, and other organisations or individuals who are interested parties to the proposals.
Dorchester Chamber President Steve Bulley said: “We hear from our members far to often that their cash flow is harmed by late payments. We welcome the Department for Business and Trade looking at this area as part of the Small Business Plan, action is long over due.”
To have your say see: Late payments consultation
With around 100 members any business in Dorset can join Dorchester Chamber from business for £60p/a (no VAT).
