GSK reinstated on the Prompt Payment Code
Published 13 August 2021
GlaxoSmithKline (GSK) has been reinstated on the Prompt Payment Code after meeting the more demanding requirements of the reformed Code.
Two entities of GlaxoSmithKline (GSK) – GlaxoSmithKline Consumer Healthcare (UK) Trading Limited and GlaxoSmithKline UK Limited, were suspended from the Code on 1 November 2019, after their payment reports from January – June 2019 failed to meet the requirement (as they were then) to pay 90% of suppliers in 60 days.
Reports highlighted that GlaxoSmithKline Consumer Healthcare (UK) Trading Limited, were paying 28% of suppliers within 60 days. GlaxoSmithKline UK Limited were paying only12% of suppliers within 60 days.
Since then, the company has drastically overhauled its payment practices and is now paying more than 95% of its suppliers within 60 days and moreover, all its UK based SME suppliers are paid on average within 18 days.
Liz Barclay, Small Business Commissioner said: “In January, we announced the relaunch of the strengthened Prompt Payment Code. The new Code requirement that 95% of invoices for the smallest businesses are paid within 30 days will help to ensure the smallest businesses maintain good cash flow and can continue to grow as part of the Build Back Better agenda.
“It’s encouraging to see that GlaxoSmithKline (GSK) recognises the value of being a signatory to the Code, and as a result have put in the hard work to improve their payment practices.
“Since the Small Business Commissioner took on administration of the Code in March 2020, we have seen more than 1126 new signatories. I urge all businesses to demonstrate their commitment to ethical payment practices and become signatories to the Code”.
Mike Cherry, National Chairman at FSB said: “Having more big corporates adhering to the Prompt Payment Code will be fundamental to our economic recovery in the months ahead.
“The UK’s poor payment culture was destroying thousands of firms every year before the pandemic hit, and covid-linked disruption has made matters worse.
“It’s great to see the new Small Business Commissioner hitting the ground running. We look forward to working collaboratively to help more companies understand that, far from being savvy, poor payment serves only to instil stress into supply chains and stifle competitiveness.”
John Foster, Chief Campaign Director at the CBI, said: “The pandemic has once again highlighted the importance of healthy supply chains. Small companies are the backbone of the UK economy yet remain most at risk from slow or late payments – particularly after months of cashflow pressure.
“Good payment practices are vital, and more companies are making positive progress, which will strengthen business relationships and shorten the road to recovery.”
ENDS
Contact: Manveer Mann on 0121 695 7761
Notes to editors:
The Prompt Payment Code, administered by the Office of the Small Business Commissioner on behalf of the Department of Business, Energy and Industrial Strategy (BEIS), is a voluntary code of ethics that businesses can join to demonstrate their commitment to paying small business owners and suppliers on time.
A commitment to the Code also covers clear guidance on payment terms and works to encourage others in related supply chains to sign up too.
In changes announced on 19 January 2021, the Code has been strengthened by:
- confirming the requirement to pay 95% invoices within 60 days
- introducing an added requirement that 95% invoices from small businesses (with less than 50 employees) must be paid within 30 days (effective from 1 July 2021 for existing signatories)
- requiring small and medium sized signatories to report annually on their payment performance, on a comply of explain basis
- promoting and strengthening the Code website
- requiring signatories to recognise the right of suppliers to charge late payment interest and charges if an invoice is paid late without justification
- stating that applications to join the Code must be signed by the Chief Executive, Finance Director or, in the case of smaller businesses, the company owner
- suppliers should be provided with a contact point for payment queries
