MPS get firm on payment Committee seeks 30-day pay-up limit

BIG firms should be legally forced to pay their small suppliers within 30 days, MPS have said.

A Commons committee has recommended time limits after accusing some large companies of acting “disgracefully”. Its report names and shames a number of firms with long payment terms.

For WH Smith and Boots the maximum is 120 days, while health retailer Holland & Barrett’s standard term is 90 days.

MPS say long delays in settling invoices has led to many small and medium-size companies going to the wall.

Rachel Reeves, chairwoman of the Business, Energy and Industrial Strategy Committee, said they were “placed in a stranglehold by larger companies deliberately paying late and ruthlessly taking advantage of their suppliers.”

As well as the statutory requirement to pay suppliers within 30 days, the report calls for bigger firms to sign the Prompt Payment Code and give the Small Business Commissioner the power to fine companies that pay late.

The report also includes claims of firms “bullying” suppliers by making them give discounts for receiving payment promptly.

Reeves said: “Unless the Government levels the playing field and acts to bring in a tougher regime for poor payment practices then we choke off the opportunity for SMES (small and medium enterprises) to invest and grow in the future.”

WH Smith told the committee its average time taken to pay suppliers was 36 days and only 15% took longer than 61 days.

Boots said its typical payment term was 31 days and that 5% were over 61 days.

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