Thu, 31 Jul 2025

Thu, 31 Jul 2025 Big firms could be fined for paying suppliers late

The government says thousands of businesses go under each year as a result of invoices being paid late.

* Large companies that consistently fail to pay suppliers on time may face fines.
* Draft government proposals aim to limit invoice terms to 2 months, with a goal of reducing this to 45 days within 5 years.
* Business Secretary Jonathan Reynolds claims the plans would be the biggest shake-up in payment rules since interest can be charged on late invoices.
* Research suggests around 1.5m businesses have been affected by late payments, with £26bn owed at any given time.
* Small firms are disproportionately affected by late payments due to their limited cash reserves and reliance on timely payments.
* The proposals would give the small business commissioner powers to fine companies that fail to pay a quarter of invoices on time within 6 months.
* Fines would be double the amount of late-payment interest, currently set at 8% plus the Bank of England base rate.
* Opposition parties have welcomed the crackdown on late payments but argue it comes too late for businesses already suffering from National Insurance rises and other policies.
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