The UK Government has unveiled new measures to support small businesses and the self-employed by tackling late payments, which they estimate costs small businesses £22,000 a year on average and leads to 50,000 business closures a year.
New legislation being brought in the coming weeks will require all large businesses to include payment reporting in their annual reports.
The enforcement will also be stepped up on the existing late payment performance reporting regulations which require large companies to report their payment performance twice yearly on GOV.UK.
Under current laws, responsible directors at non-compliant companies who don’t report their payment practices could face criminal prosecutions including potentially unlimited fines and criminal records.
The consultation which will be launched in the coming months, will also consider a range of further policy measures that could help address poor payment practices.
Prime Minister Keir Starmer said “We’re determined to back small businesses by unlocking their barriers to growth, and stamping out late payments is at the heart of this. We know how important it is for business owners to have the peace of mind and certainty around their cashflow to keep their businesses alive. Late payments cost businesses tens of thousands of pounds and is one of the biggest reasons businesses collapse.”
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