NFB: Late payments restrict growth
Jeremy Corbyn has unveiled plans to cut red tape for small and medium-sized enterprise (SME) ahead of May’s local elections.
Speaking to the Federation of Small Businesses, Jeremy Corbyn promised that a Labour Government will force large companies to pay suppliers within 30 days, set up a “binding arbitration” system to resolve late payment disputes, and scrap quarterly tax reporting for SMEs.
The National Federation of Builders (NFB) has highlighted how late payment is preventing construction SMEs from growing their business. The leader of the opposition has spoken about a crucial issue, which affects the working life of many SMEs builders. The construction industry has the worst payment performance record out of any sector in the UK economy, making up for 31% of all late payment.
The Government has already taken some action to address late payment by requiring large companies to publish details regarding their payment practices and performance twice a year – respectively on 5 October and 5 April of every tax year. This legislation came into effect on 6 April 2017.
Richard Beresford, chief executive of the NFB, said: “Construction SMEs such as our members are currently owed more than £30 billion in unpaid voices. These are the local companies that – while working hard to make ends meet – employ local workers, train local apprentices and generate money in their local economy.
“Large companies who continue to fail their payment obligations to SMEs are not helping the construction industry, especially when we need to focus our resources as an industry to address key challenges such as the shortage of skilled workers and the housing crisis.”