As reported by Business News Wales, new laws will require large businesses to report on payment practices, aiming to tackle late payments that affect over half of small UK firms
The UK Government said it would consult on tough new laws which will hold larger firms to account. It also said that new legislation being brought in the coming weeks would require all large businesses to include payment reporting in their annual reports – putting the onus on them to provide clarity in their annual reports about how they treat small firms.
Enforcement will also be stepped up on the existing late payment performance reporting regulations which require large companies to report their payment performance twice yearly on GOV.UK.
The consultation which will be launched in the coming months, will also consider a range of further policy measures that could help address poor payment practices.
Every quarter, 52% of small firms in the UK suffer from late payments, meaning roughly 2.6 million small firms face this issue, with the Federation of Small Businesses describing it as one of the biggest problems facing SMEs.
Tina McKenzie, policy chair at the Federation of Small Businesses (FSB), said: “The Business Secretary has clearly recognised the importance of eradicating bad payment culture, which so devastates the UK supplier base and holds back growth. This series of actions – including the crucial steps being taken to deliver on Business Secretary Jonathan Reynolds’ commitment on audit committees – shows the Government is rightly focused on delivery and working in partnership with the business community.
“There will be so many decisions the Government needs to get right, early – an actively pro-small business budget, a good industrial strategy and tackling late payment. Announcing this programme of work today is a huge confidence boost for the small business community and a clear signal the new Government intends to stand up for small firms.”
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