Crack-down on late payers

New measures to support small businesses and the self-employed have been announced by the Government for tackling the late payment regime, which costs small and medium sized enterprises (SMEs) on average £22,000 a year according to the Federation of Small Businesses (FSB) which then leads onto 50,000 business closures a year.

The government will, once again, consult on new laws which will hold larger firms to account and aim to get cash flowing back into SME businesses. The consultation being launched in the coming months, will also consider a range of measures that could help address poor payment practices.

New legislation is being brought in the coming weeks which will require all large businesses to include payment reporting in their annual reports. This will mean that this statistic will then become public knowledge and measurable.

Enforcement will also be stepped up on the existing late payment performance reporting regulations, which require large companies to report their payment performance twice yearly on GOV.UK. Under current laws, responsible directors at non-compliant companies who don’t report their payment practices could face criminal prosecutions including potentially unlimited fines and criminal records.

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