Politicians pledge to take action on late payments
The Liberal Democrats and the Labour Party have both pledged to take action to combat late payments that damage small and medium-sized enterprises (SMEs).
The Liberal Democrats published their election manifesto on 20 November, which includes a specific promise to tackle the problem.
According to the Liberal Democrats' manifesto, they will 'require all government agencies and contractors and companies with more than 250 employees to sign up to the Prompt Payment Code, making it enforceable'.
Speaking at the recent Confederation of British Industry (CBI) conference, Labour leader Jeremy Corbyn said: 'Small businesses will see late payments tackled, whether those late payers are larger companies or the government.'
According to the Association of Accounting Technicians (AAT), almost a quarter of insolvencies are caused by late payment issues. Late payments also damage productivity and prevent businesses from investing and growing.
The AAT is campaigning for three reforms. It wants the Prompt Payment Code to be made compulsory for businesses with more than 250 employees; payment terms under the Code to be halved to a maximum of 30 days; and a clear financial penalty regime to be established for persistent late payers, and enforced by the Small Business Commissioner.