The new late payment guidance
On 31 January 2017, the government published guidance on the new regulations aiming to tackle the issue of late payments.
From April 2017, all large companies and limited liability partnerships will need to publically report their payment practices, including the average time it takes them to pay supplier invoices. Failure to comply with these new reporting standards will be considered a criminal offence.
The data aims to help small and medium sized businesses (SME’s) make more informed decisions about the businesses they work with.
Recent findings from the payment processor, Bacs report that nearly half of the UK’s SME’s experience late payment, with almost £26.3 billion outstanding. .
Mike Cherry, the National Chairman at the Federation of Small Businesses, welcomed these changes and said “We estimate that if payments were made promptly, 50,000 business deaths could be avoided every year, adding £2.5 billion to the UK economy”.
The Regulations also include the appointment of a Small Business Commissioner to support small businesses in resolving payment disputes, with the commissioner’s office expected to be up and running later in the year.