Levy on late payers is light at the end of the tunnel for SMEs…
It was reported today that the UK Government’s Business Secretary, Vince Cable, is looking at imposing a fine on businesses that fail to pay their suppliers promptly; an initiative that if brought into practice, would no doubt prove extremely popular with SMEs, says Beatrice Bartlay, Managing Director of specialist staffing firm 2B Interface.
Bartlay said: “Late payments is one of the biggest issues confronting UK small businesses today, but it is only in recent months that it is being recognised by those in power. Larger companies are crippling SMEs by insisting on unfeasibly long payment terms SMEs are the lifeblood of the UK economy, representing 60 per cent of the workforce and 50 per cent of GDP. Unless something is done to tackle late payment now, our successes in this area will continue to be severely limited and many small and medium businesses will struggle to survive.
“Earlier this year I called for a compulsory, tighter 30-day period to be imposed across every industry and the introduction of similar levies such as those proposed this week, if these deadlines were not met. The latest revisions of legislation from the UK Government in March supported the need for timely payment, but gave 60 days as the recommended maximum payment term, which many still neglect to adhere to,” she said.
Recent research suggested that payments continue to get later, with an average of overdue invoices being paid 24.58 days beyond terms for the second quarter this year. A day later than the same quarter in 2012
Bartlay concluded: “The first few years for an SME is an extremely tough and telling period, and they’ll only survive on a decent cash flow. Why hinder what is great about Britain with the mass of innovation and bright young start-ups with something as simple as not being paid for what was delivered?”
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