A legal duty for large businesses to report on their payment practices was included in the Small Business, Enterprise and Employment Act 2015 as part of Government initiatives to speed up payment to small businesses.
At the same time the government announced its intention to set up a voluntary initiative, the Prompt Payment Code, to which businesses would be encouraged to sign up.
Although the new rules were meant to come into force in April this year, this was delayed until October.
Now there has been a further update from the Government which states that the statutory duty for large businesses to report will not now come into force until 6 April 2017, at the start of the new financial year, although they are being encouraged to sign up early.
While there is still some consultation taking place and further work planned for the website to refine the signing up process for businesses taking part voluntarily, there has been some progress, according to a letter and announcement last week to those who have already signed up to the code.
Additional measures and a progress report were announced by Margot James, Minister for Small Business and Philip King, CE of the Chartered Institute for Credit Management (CICM), which is administering the scheme.
They include the establishment of a compliance board to oversee the scheme, the proposed future appointment of a Small Business Commissioner and confirmation that central government departments are committed to a target of paying 80% of undisputed invoices within five working days and the balance within 30 days.
The letter also revealed that there have already been successful challenges against those businesses already signed up, of which there are now more than 1,800 from all over the country.
There is more information about the initiatives on the Prompt Payment Code website including a full list of the signatories.
Specifically, our SME clients are encouraged to check whether larger customers have signed up to the code and whether their payment terms conform to the code.
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