West Lancashire MP Rosie Cooper has backed calls by the Association of Accounting Technicians (AAT) for reform of the Prompt Payment code.
The Prompt Payment Code (PPC) sets standards for payment practices and best practice and is administered by the Chartered Institute of Credit Management on behalf of the Department for Business, Energy and Industrial Strategy (BEIS).
The PPC aims to eliminate unfair payment practices to small businesses. Code signatories undertake to pay suppliers on time, give clear guidance to suppliers in areas including payment procedures, and encourage good practice.
According to YouGov research, 73% of MPs agree with the AAT’s recommendations that the Prompt Payment Code:
- be made compulsory for companies employing more than 250 employees
- see maximum payment terms halved from 60 to 30 days
- be supported by a clear, simple financial penalty regime for persistent late payers, enforced by the Small Business Commissioner
Rosie Cooper MP said:
“I am supporting small and medium sized businesses in West Lancashire by backing the AAT’s recommendations for Prompt Payment code reform.
“Smaller businesses and suppliers rely upon the timely payment of invoices by larger companies, manufacturers and retailers to ensure their continued existence and growth.
“These businesses provide income for their owners to support their families, and to supply jobs in the local economy, and so we must do all we can to help them.
“West Lancashire has many small businesses across many industries including farming, manufacturing, building, marketing and online, and retail and it is these businesses which need to be paid on time.”
Phil Hall, AAT Head of Public Affairs & Public Policy, added:
“Late payments lead to thousands of insolvencies every year, damage productivity, restrict investment and can also impact on the mental health of small business owners and their employees.
“Government action to tackle this problem, from the voluntary payment code to compulsory but feeble reporting requirements – as well as the creation of a Small Business Commissioner with no real power – have all predictably failed to stem the scourge of late payments.
“With almost three quarters of MPs from across the political divide supporting AAT’s recommendations for payment reform, it’s very difficult for the Government to continue to drag their heels and back the status quo. We trust that the Small Business Minister will bear these facts in mind when she considers what to do next.”
The AAT recommendations have already gained the backing of the recruitment and construction industries, SMEs and most recently the Business, Energy & Industrial Strategy Committee made the same recommendations in a recent report on small business productivity.
Association of Accounting Technicians (AAT) is a professional body with over 140,000 members including 4,250 licensed accountants who provide accountancy and tax services to more than 400,000 British SMEs. Many of these British SMEs are negatively affected by late payments.
According to the YouGov poll almost three quarters (73%) of MPs agree with the three changes AAT has long recommended be made to the voluntary Prompt Payment Code.