Getting to prompt payment: your view
In last week’s post, I shared that on launch of the Small Business Plan, a consultation was opened on potential new measures to reach a state of prompt payment in the UK. It would be wonderful to hear your view in the form of a response to the consultation.
The proposals on which views are being sought:
- Strengthening maximum payment terms on invoices to 60 days, with an intent to move to 45 days over five years
- Introducing a deadline of 30 days for companies to dispute invoices
- Making the payment of interest on late payments mandatory in a way that moves the onus from the small business asking for interest on late invoices to it automatically being applied
- Requiring large companies to report the amount of interest they owe on late payments
- Introducing penalties for companies that are persistent offenders of paying late
- Increasing discussion and scrutiny of payment practices at board level including the role of audit committees when it comes to communicating payment performance to company Directors
- Reducing poor practice around the use of retention clauses in construction contracts
- Giving more powers to the Office of the Small Business Commissioner to enact the above proposals
Should legislation come into effect, it will significantly increase transparency around payment times and, with more companies sharing information, action can be taken if practices aren’t in order.
The consultation is open until 23 October. I hope you will consider inputting so the end result can be designed by you, for you.