Business welcomes UK resolve to end late payment crisis
by Bija Knowles
The UK government's Spring Statement yesterday brought some good news for UK businesses, large and small. Chancellor Philip Hammond provided an update on the state of the UK's finances, following the October budget, and promised a review on how to stop the problem of late payments – which are particularly damaging for smaller firms, although they affect the whole supply chain.
Hammond told the House of Commons yesterday: “We will launch a Call for Evidence to understand how best we can help the UK’s least productive businesses to learn from, and catch-up with, the most productive. And another on how we can eliminate the continuing scourge of late payments – a key ask from small business.”
Action to tackle late payments had been a particular request from the Federation of Small Businesses (FSB) prior to Hammond's speech. The FSB's Mike Cherry welcomed the Chancellor's statement, saying that a clear message had been sent to UK boardrooms “by committing to ending the late payment crisis that destroys 50,000 businesses a year”.
Cherry went on to say: “We look forward to working with the Chancellor and his team to eliminate the scourge of late payments. Ending the late payment crisis could add £2.5 billion to our economy annually and help close the productivity gap.
“Eight in ten small firms suffer from late payments. The collapse of Carillion highlighted the dangers of the UK’s pernicious poor payment culture. We need to create an environment where another Carillion can’t happen.”
Other items in the Spring Statement that could affect large and small businesses include:
- Consultation on a new VAT collection mechanism for online sales;
- Government sets out ideas for "fairer" taxation of multinational digital businesses; and
- Next revaluation of business rates to be brought forward by one year to 2021.
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