Crackdown on the ‘scourge’ of late payments

by Matt Oliver BIG companies will be forced to reveal how long they take to pay small suppliers as part of a crackdown on the ‘scourge’ of late payments.

Chancellor Philip Hammond said the information must be published in annual reports – a major victory for small businesses, who have long complained that late payments send thousands to the wall.

When outsourcer Carillion went bust last year, more than 30,000 sub- contractors were owed hundreds of millions of pounds. Yesterday, Hammond vowed ‘definitive action to tackle the scourge’. He added: ‘We will require company audit committees to review payment practices, and report on them in their annual accounts.’

Non- executive directors would be given responsibility for reporting on how quickly suppliers were being paid. It would initially only apply to listed companies but could be expanded to other firms.

the Financial reporting Council has been asked to look at whether it can change existing rules or if the Government needs to pass legislation. It comes after a campaign by the Federation of small Businesses (FsB) calling for ministers to act on late payments.

the group estimates 50,000 small firms a year collapse because of the problem.

around 60pc of its members are owed up to £10,000 in late payments from their clients.

Mike Cherry, chairman of the FsB, said: ‘at a time of great uncertainty, the Chancellor has shown today there is still plenty of scope to support the Uk’s small businesses.

‘Four out of five small businesses have been paid late, and we told the Chancellor that today was the moment to tackle this scourge once and for all. the commitment from is welcome.

‘the end of late payments could finally be in sight. It can’t come soon enough.’