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The Government has introduced the Small Business Protections Bill to Parliament, setting out a package of measures aimed at tackling late payments and strengthening protections for small firms.
The legislation, introduced in the House of Lords on 19 May, would introduce a 60-day cap on payment terms for large firms paying smaller suppliers, mandatory interest on late payments and new enforcement powers for the Small Business Commissioner. The Government says the reforms are intended to address late payment practices estimated to cost the UK economy £11bn each year.
Under the proposals, the Small Business Commissioner would gain powers to investigate poor payment practices, adjudicate disputes and issue financial penalties against persistent offenders. The Bill would also require boards and audit committees at large firms to explain poor payment performance and outline steps being taken to improve it.
The Government has said it sought to balance stronger protections for smaller suppliers with concerns raised by larger businesses during consultation, including through limited exemptions from maximum payment terms.
The BVRLA will continue to monitor the progress of the Bill and assess the implications for members as the legislation moves through Parliament.
