Late payments are crippling small business – Angela calls on UK Government to ‘step up to the plate’ and protect SMEs

Lanark and Hamilton East MP Angela Crawley has today written to the Minister for Small Business – Anna Soubry – calling for more action to be taken to protect small to medium sized enterprises (SMEs).

According to the Federation of Small Business (FSB), one of the largest problems encountered by SMEs is the delay of payments for services and goods.

A recent survey by the FSB found that more than 50 per cent of payments to SMEs from large businesses are late. The survey also found that in central Government Departments and Government agencies only 70 per cent of invoices being paid early or on time.

As well as taking action on late payments, the local MP has also called for the Government to scrap the new rules requiring small businesses to report quarterly to HMRC.

Commenting, Angela said:

“Late payments pose huge difficulties for SMEs. For a small business, 90 days is too long to wait before receiving payment.

“Businesses that are not making huge profits rely on fast, reliable payments to ensure their companies can continue to operate.

“The Government’s proposal to introduce a Small Business Commissioner to tackle the scourge of late-payment is welcome. But it will only assist small businesses if the Commissioner is equipped with sufficient powers to intervene and resolve late-payment disputes quickly and effectively.

“On top of their commitment, more still needs to be done. The prompt payment code needs strengthened quickly, and the Government must take action on the unfair quarterly reporting for SMEs.

“As a result of quarterly reporting, some small firms will have to outsource their returns to accountants at a substantial cost – putting further financial pressure on an already struggling sector.

“SMEs are the engine of our economy. If our economy is to thrive, we must take urgent action to remove unnecessary costs attributed to running a small business.