Guidance to help large businesses report on how quickly they pay their suppliers will be published, as regulations are laid in parliament by Small Business Minister Margot James.
The regulations confirm that from April 2017, large companies and limited liability partnerships (LLPs) will have to publically report twice a year on their payment practices and performance, including the average time taken to pay supplier invoices.
Failure to report will be a criminal offence and the guidance published will help large businesses and limited liability partnerships prepare for these measures coming into force.
The changes are part of a package to shine a spotlight on bad payment practice and lead to improved standards. This includes the appointment of the Small Business Commissioner to support small businesses in resolving payment disputes, with the Commissioner’s office expected to be up and running later in the year.
Recent findings from the payment processor Bacs report that nearly half of the UK’s small-to-medium sized businesses experience late payment, with £26.3 billion owed to them in total. The regulations laid in Parliament aim to tackle this by increasing transparency and helping small businesses make informed decisions about who they do business with.
The modern industrial strategy green paper sets out a plan to improve living standards and economic growth by increasing productivity and driving growth across the whole country. We encourage businesses of all sizes and anyone with an interest to respond.
Small Business Minister Margot James said:
“The UK is home to a record 5.5 million small businesses and the industrial strategy will help address many of the challenges they face getting finance and scaling up. It’s completely unacceptable that small and medium-sized businesses are owed £26.3 billion in late payments, which hampers their ability to grow and has no place in an economy that works for all.
Large businesses have an important role to play and the guidance published today will help them fulfil their responsibilities and improve payment practices across the board.”