UK Government launches late payment consultation challenging ‘grossly unfair’ terms and practices
On February 3rd, the UK Department for Business, Innovation and Skills launched a consultation, “Late payment: challenging ‘grossly unfair’ terms and practices”
Late payment remains a serious issue for businesses, especially small businesses. The consultation document says small and medium businesses are owed a total of £39.4 billion, and small businesses are waiting for an average of £38,200 in overdue payments.
This has a damaging knock-on effect on small businesses’ ability to manage their finances and plan for growth, and pushes late payment down the supply chain, potentially affecting many more firms.
The Small Business, Enterprise and Employment Bill currently before Parliament is making changes to improve the prompt payment reporting, and discussions are underway to strengthen the Prompt Payment Code.
The consultation document explores ways to provide business representative bodies with additional powers to challenge ‘grossly unfair’ contractual terms and practices as set out in the 2011 EU Late Payment Directive. BIS is seeking views on how these changes could be best implemented.
Matthew Hancock, Minister of State at the Department for Business, Innovation and Skills says “Alongside the legislative changes, we are also strengthening the Prompt Payment Code, making it a beacon of best practice, to ensure that those businesses that are signed up to the Code receive the recognition they deserve as responsible and fair businesses who pay their suppliers promptly and on time. Equally, I intend to make clear which businesses do not adhere to the Code, and, if they fail to meet the standards, are removed as quickly as possible.”
The consultation welcomes comments from across industry, particularly from business representative bodies and small businesses on changes and the definition of ‘grossly unfair’ when it comes to payments.
Consultation closes March 9th https://www.gov.uk/government/consultations/late-payment-challenging-grossly-unfair-terms-and-practices
– See more at: http://www.sharedserviceslink.com/news/uk-government-launches-late-payment-consultation-challenging-grossly-unfair-terms-and-practices#sthash.Q4DtACyp.dpuf