The government has announced tougher measures to tackle the issue of late payments to SMEs. These new measures will be included in the upcoming Prompt Payment and Cash Flow Review, due to be published shortly, and will improve delivery and enforcement of policies.
In 2022, SMEs were owed on average an estimated £22,000 in late payments. New measures to combat the problem will include broadening the powers of the Small Business Commissioner to undertake investigations and publish reports on the basis of anonymous information and intelligence. This will require primary legislation, so will be subject to the legislative timetable.
Other new measures include:
- Extending payment performance reporting obligations - there will be new metrics for reporting, including a value metric, so businesses and commentators can see the value of metrics
- Providing greater advice for small businesses on negotiating payment terms that better suit their needs
- Strengthening the Prompt Payment Code so that signatories must reaffirm their commitment every two years to stay on it
Small Business Minister Kevin Hollinrake said: “Small businesses form a crucial part of large companies’ supply chains. Without them, they couldn’t do business. It’s only right that they should be paid promptly for their services. SMEs that are paid on time can do more business, scale up and make more profits, delivering growth for the economy.”