Big businesses will now have 30 days to pay their suppliers under changes to the Prompt Payment Code (PPC).
Big businesses will now have 30 days to pay their suppliers under changes to the Prompt Payment Code (PPC).
The Code is a voluntary scheme whereby large businesses commit to paying small businesses in their supply chain within a certain timeframe in a bid to reduce the estimated £23 billion worth of late payments and unpaid invoices.
Previously, businesses were required to make payments within 60 days but this has now been reduced to 30.
The government says the issue of late payments has grown throughout the Covid-19 pandemic. Small Business Minister Paul Scully said: “Our incredible small businesses will be vital to our recovery from the coronavirus pandemic, supporting millions of livelihoods across the UK.”
More than 2,800 businesses are signed up to the Prompt Payment Code. The updated rules mean that any business with fewer than 50 employees must be paid within the 30 day limit, but those with more than 50 staff still fall under the 60 terms.
“Late payment causes real hardship to small businesses, and the issue is more prevalent than ever due to the continued impact of the pandemic. Code signatories of all sizes demonstrate their commitment to ending the culture of late payment and helping to increase business confidence,” said Interim Small Business Commissioner Philip King.
Ending our pernicious poor payment culture for good over the coming months will be fundamental to turning our hopes of economic recovery into reality,” said FSB national chairman Mike Cherry.
