February 27 2015
The Department of Business Innovation and Skills (BIS) announced yesterday changes to its Prompt Payment Code to promote thirty day terms as the standard with a maximum of sixty only in exceptional circumstances.
Signatories to the code that do not meet the new targets will face expulsion.
The prompt payment code had previously been criticised by industry for allowing large businesses to remain listed as signatories while paying on time (but setting their terms to 90 or even 120 days).
Business Minister Matthew Hancock said:
"Making small businesses wait an unreasonable time for payment is entirely unacceptable. I know first-hand the great burden that late payment can place on firms – and how it can strain family finances – which is why I am committed to stopping it.
Big companies should lead by example and pay small suppliers within 30 days. I have already written to the FTSE 350 urging them to sign up to the Prompt Payment Code."
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