PARLIAMENTARY WRITTEN QUESTION
Small Businesses: Billing (24 April 2020)

Legislation already exists under the Late Payment of Commercial Debts (Interest) Act 1998, which sets out that payment terms between two businesses should not exceed 60 days, unless they are fair to both parties. Additionally, suppliers can claim statutory interest, and debt recovery costs, on invoices not paid within the agreed period or (if no period is agreed) within 30 days. It also establishes maximum 30-day payment terms for transactions with public authorities.

The Government is completely focussed on fulfilling our manifesto commitment to clamp down on late payment and strengthen the powers of the Small Business Commissioner (SBC) to support small businesses who are least able to cover financial shortfalls and find temporary finance more difficult and more expensive to obtain.

The Government has transferred the administration of the Code to the Office of the SBC in March to unify prompt payment measures under one umbrella and we continue to consult on extending its powers. We have also taken a tough compliance approach to large companies who do not comply with the Payment Practices Reporting Duty and will use enforcement powers to prosecute those who do not comply where obliged.