Small businesses to be backed by new, stronger measures to tackle late payments, the government has announced.
The Small Business Commissioner will be given sweeping new powers to investigate poor payment practices, adjudicate payment disputes, and fine the worst offenders – with fines worth tens of millions for firms that persistently pay late or fail to comply with the new laws.
The government says the measures will tackle a problem costing the UK economy £11 billion every year.
The changes will include a new 60-day cap on payment terms on all large firms when paying smaller suppliers. New mandatory interest on late payments will also be introduced, with a requirement for all commercial contracts to include statutory interest set at 8% above the Bank of England base rate.
Business Secretary Peter Kyle said:
'Far too many businesses are forced to shut down because they have not been paid – that is simply unacceptable.
'We are unveiling the strongest, most robust changes to payment laws in over a generation – laws that will transform the fortunes of small businesses for years to come and make their day to day lives much easier.'
Internet link: GOV.UK