BT among eighteen businesses suspended from Prompt Payment Code
25th July 2019
By Lyndsey Hall
BT, Screwfix and Prudential are among the eighteen companies that have been suspended from the Prompt Payment Code for failing to pay suppliers on time, according to the Chartered Institute of Credit Management (CICM).
The Prompt Payment Code’s Compliance Board performs regular reviews of organisations on their register to ensure they are upholding their commitments. Those who are falling below the expected standards set out in the code are then suspended. The PPC states that member businesses, as a minimum, pay their suppliers within 60 days, 95 per cent of the time. Signatories pledge to uphold this payment standard in a bid to clamp down on late payment, which has been voted one of the biggest financial issues facing small businesses in the UK.
The eighteen companies now suspended from the code are:
- Severfield (Design & Build) Ltd
- Stantec UK Limited
- British American Tobacco (Holdings) Limited
- Galliford Try PLC
- Alun Griffiths
- Ferrovial Agroman (UK) Limited
- BAE Systems Global Combat Systems Limited
- BAE Systems Applied Intelligence Limited
- BAE Systems (Oman) Limited
- Maintenance Management Limited
- Fujitsu Services Limited
- De La Rue Holdings plc
- Domino UK Ltd
- BT plc
- AB World Foods
All suspended businesses have been invited to produce an action plan for the Code’s compliance board on improving payment practices substantially. Seventeen out of the eighteen companies have submitted an action plan and will be reinstated as soon as they demonstrate compliance. AB World Foods is yet to submit an action plan.
According to the Federation of Small Businesses (FSB), 80% of the small business community if effected by poor payment practices, resulting in the closure of 50,000 small firms every year. In May, the FSB called on Theresa May to use her final days as Prime Minister to push through proposed reforms to payment practices.
FSB’s national chairman, Mike Cherry said, “Ending late payments and poor practices is not only the right and fair thing to do, it will also spare small firms the financial impact of waiting for the money they’re owed, and instead allow them to invest and grow.”
On 19th June, small business minister Kelly Tolhurst unveiled a new package of measures she hopes will “end the unacceptable culture of late payment”.
As well as introducing new powers for the small business commissioner and holding large corporations accountable for their payment practices, the government will also create a new fund to encourage small businesses to embrace technology that will help streamline their credit control process.
There are a few things small businesses can do to combat late payments and lessen the effects when they do happen. You can:
- claim interest and debt recovery costs if a business transaction is made 60 or more days later than the payment date.
- charge statutory interest on late payments. This is a rate of 8% plus the Bank of England base rate.
- claim debt recovery costs of £40 for debts up to £999.99, £70 for debts between £1,000 to £9,999.99, or £100 if you're owed £10,000 or more.
Edwin Morgan, interim director-general of the Institute of Directors, said the measures marked a "significant step forward in the fight against late payments".
Has your small business been the victim of late payments and poor payment practices? How do you tackle the issue, or prevent it from hapeing in future? Give us your best tips for combatting late payments in the comments, or on our Twitter and Linkedin pages.