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Cable ‘considering fines for late payers’

 

Businesses that fail to pay their suppliers on time could incur a penalty under plans reportedly being considered by the Business Secretary Vince Cable.

 

With small businesses owed more than £30 billion in outstanding payments, the Government is investigating a number of options to tackle what it describes as an ‘unfair’ late payment culture.

 

Introducing a late payment levy on companies that do not pay their suppliers within 30 days is one idea being discussed. Currently, some small firms are forced to wait up to 180 days for payment, while others face even longer delays.

 

Other proposals under review include initiatives targeted at specific sectors such as construction, where the issue of late payment is believed to be particularly prevalent.

 

‘Vince Cable is concerned about companies struggling because others aren’t settling bills on time,’ said a Business Department spokesman. ‘This has an unfair effect on them growing their businesses. He’s looking at what can be done by Government to help.’

 

It is thought that less than half of Britain’s biggest companies have signed up to the Prompt Payment Code, a voluntary agreement designed to encourage and promote best practice between organisations and their suppliers.

 

In a recent study by the Forum of Private Business (FPB), 35% of the small firms questioned said they had seen a reduction in profit, while 16% reported a noticeable reduction in turnover as a response to late payment or bad debts.

 

Please contact us if overdue payment is becoming an issue for your business.