A YouGov poll commissioned by the Association of Accounting Technicians (AAT) showed 73% of MPs agree with the three changes AAT has recommended be made to the voluntary Prompt Payment Code.
These are that the Code:
- be made compulsory for companies employing more than 250 employees
- see maximum payment terms halved from 60 to 30 days
- be supported by a clear, simple financial penalty regime for persistent late payers, enforced by the Small Business Commissioner
No MP disagreed with the proposals which have already gained the backing of construction industry campaigners.
Phil Hall, AAT Head of Public Affairs & Public Policy, said: “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 almost three quarters of MPs from across the political divide supporting AAT’s recommendations for payment reform, it’s very difficult for the Government to continue to drag their heels and back the status quo.
“We trust that the Small Business Minister will bear these facts in mind when she considers what to do next.”
The Department for Business, Energy & Industrial Strategy (BEIS) recently held a public Call for Evidence on the issue of late payments and says it is currently “analysing feedback”.