Prompt Payment Code
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12 Nov 2012
Small and medium sized businesses across the UK are suffering as a result of late payments - in particularly by large firms. Late payments occur when large companies withhold payment from their suppliers for long periods after the due payment date, and this is a growing scandal.
Currently more than a million small businesses, including local family firms, are affected by late payment. The total outstanding funds owed amount to £36.4 billion and the average amount owed to each small business has reached £36,000. Late payments therefore threaten to put many out of business.
Under the last Government significant progress was made to sign up big business to a Prompt Payment Code, but progress has now stalled under this Government as many companies have refused to sign up to the Code.
The Prompt Payment Code is hardly onerous; it simply asks large businesses to pay their supplier on time as agreed in their contracts. It is simply unacceptable that large businesses are effectively bankrolling themselves with small businesses’ money and that the Government is doing nothing to demonstrate that this practice is unacceptable.