BUDGET: Introduce fairer late payment system for small firms

Pile of pound coins. ENGPNL00420111121110612
Pile of pound coins. ENGPNL00420111121110612

A firm in Milton Keynes is calling on the government to make rules on late payments fairer to small businesses ahead of today’s budget.

Laura McGimpsey, of the Milton Keynes branch of 2B Interface says introducing a tiered system will stop rules favouring enterprise and support small businesses

She said: “The economy may be recovering – thanks largely to increased confidence and higher value contracts in manufacturing, a key industry in Milton Keynes – but late payments continue to be the scourge of running a small business. I opened my branch of 2B Interface in April this year, and cash flow is absolutely critical to the early stages of ensuring that we are a success. I don’t have the resource to act as a credit card to the companies I supply to.”

She added it was time to stop larger businesses holding smaller suppliers ‘to ransom’ over payment and a healthy cash flow for small businesses was need to help them grow.

She said: “Current guidance from the EU suggesting a 30-day payment period for any company – remember this is not law – protects larger companies but fails to recognise the inherent need for small businesses to be able to defend themselves against huge hits to cash flow. This needs to change.”

The tiered system should allow 30 days to pay those businesses with a turnover of less then £1.5m, 60 days to pay the mid-sized sector and 90 days to pay those businesses with a turnover of above £7m.