MPs support fines for late payments to suppliers
Three quarters of a sample of 100 MPs from all political parties have endorsed proposals put forward by the Association of Accounting Technicians (AAT), which were also endorsed by the Business, Energy & Industrial Strategy (BEIS) committee of MPs in December. The MPs were surveyed by YouGov and the research was commissioned by the AAT.
The BEIS committee’s measures support three of the AAT’s core recommendations. Firstly, to make the ‘Prompt Payment Code’ a legal requirement for businesses that employ more than 250 employees. The code calls for payment within 30 days to become the norm.
In addition, the BEIS committee supports proposals to issue financial penalties for persistent late payers and to halve maximum payment terms from 60 to 30 days.
Phil Hall, AAT’s head of public affairs and public policy, explained: “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.”
With support from close to three quarters of MPs from across the political divide for payment reform, Hall believes it is difficult for the government to “continue to drag their heels and back the status quo”.