Big businesses to reduce payment times to small suppliers
21st January 2021
Larger businesses must now pay their smaller suppliers much faster under changes to the UK’s prompt payment code (PPC).
The Department of Business, Energy and Industrial Strategy revealed businesses that have signed up to the PPC will be obligated to pay smaller businesses within 30 days, instead of the previous 60 days. The code currently has 2,800 signatures.
According to the Federation of Small Businesses (FSB), around 50,000 small firms close every year due to late payments and said the issue has become “more prevalent than ever” as a result of the COVID-19 pandemic.
Philip King, interim small business commissioner, said:
“Late payment causes real hardship to small businesses.
“Code signatories of all sizes demonstrate their commitment to ending the culture of late payment and helping to increase business confidence.”
Mike Cherry, national chairman of the FSB, added:
“Ending our pernicious poor payment culture for good over the coming months will be fundamental to turning our hopes of economic recovery into reality.”
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