29 Jan 2015
The Federation of Small Businesses (FSB) has assembled a cross-party group of MPs to help tackle the problem of poor payment practices facing a significant number of small firms in the UK.
According to research carried out by the FSB, nearly one in five small businesses has been the victim of poor payment tactics, with 5% being subject to ‘supplier assessment charges’, otherwise known as ‘pay to stay’, whereby suppliers are asked to pay a fee in return for being considered for future business contracts.
Other key problems reported by small businesses include excessively long payment terms, exceeding or changing existing payment agreements, applying discounts for prompt payment and retrospective discounting.
Mike Cherry, FSB National Policy Chairman, said, ‘It is simply unacceptable for any company to exploit its market position to enforce unfair and unreasonable payment terms. The money outstanding in late payments is in the billions and has consistently grown larger and larger. We need greater leadership from all parties competing to be in the next Government to toughen up the prompt payment code and improve the UK’s payment culture’.