The Association of Accounting Technicians (AAT) has voiced support for the UK Government’s decision to introduce tougher rules on late payments, including wider authority for the Small Business Commissioner.
The reforms, led by the Department for Business and Trade (DBT), follow joint research by the department and the commissioner indicating that delayed invoice payments drain close to £11bn from the UK economy each year.
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The same research suggests that payment delays are a factor in the closure of 38 companies every day, while business owners spend an average of 86 hours annually trying to recover overdue sums.
The AAT said it has been actively involved in the consultation process.
The new powers will allow the Small Business Commissioner to impose financial penalties on persistent late payers. Additionally, the commissioner will have the authority to resolve late-payment disputes outside the courts.
AAT Strategy and Compliance executive director Rebecca Roberts-Hughes said: “AAT welcomes the government’s announcement of legislation to tackle late payments and strongly supports its commitment to introducing these vital reforms.
“The confirmed steps, capping payment terms, applying financial penalties to repeat offenders and giving the Small Business Commissioner much needed powers, match exactly what AAT has long called for.
“These measures finally put real teeth into enforcement and hold large companies properly accountable for poor payment behaviour that has hurt small businesses for far too long. This is a game-changing opportunity to shift UK payment culture for good, shield thousands of small firms from cash flow damage and boost economic growth.
Recently, the Association of Chartered Certified Accountants also backed the UK Government’s plans to tighten rules on late payments.
