MPs back plans to fine companies for late payments to suppliers

MPs have backed new plans to fine firms that repeatedly fail to pay suppliers within 30 days.

A YouGov poll commissioned by the Association of Accounting Technicians (AAT) found that nearly three-quarters (73 percent) of MPs agreed with new measures proposed by ATT to cut-down on late payers, the Guardian reported.

The changes to the voluntary Prompt Payment Code advised by AAT propose to cut-down on delayed payments, with maximum payment terms halved from 60 to 30 days and would affect companies employing more than 250 employees. The code would also see a clear penalty for any firms who missed payment deadlines, enforced by the Small Business Commissioner.

Of the 200 MPs surveyed across all parties, 16 percent neither agreed or disagreed with the changes and 11 percent didn’t know. No MP disagreed with the proposals.

Commenting on the news in a statement, Phil Hall, AAT Head of public affairs and public policy, said: “Late payments lead to thousands of insolvencies every year, damage productivity, restrict investment and can also impact on the mental health of small business owners and their employees.

“Government action to tackle this problem, from the voluntary payment code to compulsory but feeble reporting requirements – as well as the creation of a Small Business Commissioner with no real power – have all predictably failed to stem the scourge of late payments.

“We trust that the Small Business Minister will bear these facts in mind when she considers what to do next.”

Photo credit: Pexels, Dominika Gregušová