New powers will be handed to the small business commissioner to fine big companies that persistently pay their suppliers late – leaving smaller businesses struggling
Firms who pay their suppliers late will face fines running to millions of pounds as bosses were warned “it’s time to pay up”.
Keir Starmer said “too many hardworking people are being forced to spend precious hours chasing payments” as he unveiled a new crackdown on the scourge of late payments.
New powers will be handed to the small business commissioner to fine big companies that persistently pay their suppliers late, leaving smaller firms struggling. It comes after The Mirror’s Kevin Maguire wrote: ‘Labour must find engaging story for the UK – or face election wipeout’.
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Tougher enforcement rules will mean customers must pay their supplier within 30 days of receiving a valid invoice, with spot checks to help identify breaches. Upcoming legislation will introduce maximum payment terms of 60 days, reducing to 45 days.
The Prime Minister said: “From builders and electricians to freelance designers and manufacturers – too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses.
“It’s unfair, it’s exhausting and it’s holding Britain back. So, our message is clear, it’s time to pay up.
“Through our small business plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive, driving growth across the country through our plan for change.”
The move comes as part of a £4billion package to help small business get off the ground, including a £1billion boost for new businesses, with 69,000 Start-Up Loans and mentoring support.
It comes amid pressure on the Government to do more to help businesses in the wake of the national insurance hikes and increases to the minimum wage.
Business Secretary Jonathan Reynolds said: “This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best – growing our local economies,”
“Our small business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs (small and medium-sized enterprises) the financial backing they need.”
Tina McKenzie, of the Federation of Small Businesses (FSB), said: “Making sure businesses are paid on time, that our high streets thrive, and creating conditions in which everyone can start and succeed in business are crucial priorities for small businesses, communities and the economy.”
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