Reforms to the Prompt Payment Code will provide a much-needed lifeline for small businesses

The Association of Professional Staffing Companies (APSCo) has welcomed the overhaul of the Prompt Payment Code (PPC) outlined by the Government. The reforms will see the time-frame for payment from those businesses that have signed the Code halve to just 30-days.

This move will provide some much-needed relief for small businesses that are facing an extended period of uncertainty and further strengthens the powers of the Small Business Commissioner (SBC) to ensure small firms are paid on time.

According to a statement from the Government, £23.4 billion worth of late invoices are owed to firms across the UK. With businesses already facing a difficult economy amidst another national lockdown, the impact of these late payments to a firm’s cashflow could be highly damaging.

Tania Bowers, Legal Counsel and Head of Public Policy at APSCo, commented:

“Small businesses are facing a difficult time at the moment and any measures to support these organisations is welcome news. Many have already faced challenges accessing payments from business interruption insurance polices with insurers turning down claims. While the Supreme Court has ruled in favour of small companies on this issue, it is just one of many financial pressures facing company owners in these difficult times.”

“For smaller organisations, late payments and difficulties accessing funds owed through insurance schemes could be the difference between surviving these difficult times and making some very difficult staffing and cost-cutting decisions. Now more than ever, the UK’s small businesses need support from not only the government, but also the businesses they act as crucial suppliers to.”

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