IoD welcomes Government crackdown on poor payments practices

“For far too long many bigger customers have regarded delayed payments to suppliers as an inevitable part of doing business. However, payments beyond agreed dates or offering suppliers long payment terms in contracts comes with a huge negative impact. Not only do poor payment practices cost the UK economy £11bn a year, they contribute to the closure of 38 businesses a day, cause worry for suppliers, take up time on chasing payments and leave otherwise viable and efficient businesses less productive than they could be and struggling to manage their cash flow.

“We are therefore delighted to see that the Government is committed to putting an end to late and long payments along with measures to cut administrative costs, modernise the tax and customs system, unlock access to finance, and boost business skills, as well as backing the high streets.

“We understand that the various measures outlined in the plan launched today require consultation responses and subsequent legislative change, and that there won’t be change overnight, but we’re very pleased to see the Government clearly stating its intent. No one can doubt the direction of travel. We need fairer payments, better support and modern systems to make sure all businesses are contributing to a more resilient and sustainable productive economy, capable of delivering the growth we need.

“As the government consults on these upcoming changes, the IoD is committed to working with government to ensure that the interests of businesses of all sizes are taken into account and that there are no resulting unintended consequences.”