The Business, Energy and Industrial Strategy (BEIS) Committee recently published how ‘bad payment practices’ have led to the ‘failure’ of many small and medium-sized enterprises (SMEs).
According to the committee, the Prompt Payment Code has ‘too often’ been ‘ineffective’ and a ‘statutory requirement’ for companies to pay within 30 days is required.
It also recommended permitting the Small Business Commissioner to fine large businesses who pay suppliers late.
Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘Eliminating the scourge of late payments would see 50,000 businesses saved each year, [and] add £2.5 billion to GDP, which would be a real boost to UK productivity’.
‘The government must respond to this report with tough action on late payments, supporting smaller businesses to develop further their leadership and management capability and to improve the adoption of basic digital technologies that small businesses need to grow and become more productive.’
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