The UK is already one of the best places in the world to start and grow a business. It is home to a record 5.5 million businesses – that’s 1 million more than in 2010. Through our Industrial Strategy we are committed to fostering an environment in which small firms can thrive, and that means tackling barriers to growth.
Late and unfair payment terms are a significant threat to small business survival, tightening cash flow and impairing their ability to self-invest and grow. According to BACs, the UK’s small-and-medium sized firms are currently owed £26 billion in overdue payments.
Our Industrial Strategy aims to get every part of the UK firing on all cylinders and create an economy that really works for everyone. The common practice of late payment does not fit this vision and it is vital that we recognise that large businesses have a crucial role to play in tackling this issue.
From today large companies and Limited Liability Partnerships will be required to start reporting on their payment practices and performance for their next financial year. This means twice per year, large businesses will publish information such as the average time taken to pay their supplier invoices. The requirement will apply to businesses that exceeded 2 of the following criteria in the previous 2 years:
- £36 million turnover
- £18 million balance sheet total
- 250 employees
Article excerpt by Small Business Minister Margot James on late payment – read the full article here: www.gov.uk/government/speeches/small-firms-deserve-to-be-paid-on-time