The Association of Plumbing & Heating Contractors (APHC) has welcomed the Government’s new measures to increase transparency of payment practices to support small businesses.
Coming into force from April 2017, this new ‘duty to report’ will require large companies and limited liability partnerships to publicly report twice yearly on their payment practices and performance, including the average time taken to pay supplier invoices.
As of June 2015, the overall level of late payment owed to small and medium sized businesses was reported as £26.8 billion. By introducing this new legislation the government aims to improve payment standards by shining a spotlight on late and bad practices.
APHC’s CEO, John Thompson, commented: “I know from speaking with members in the plumbing and heating contracting sector who deal with large companies that not receiving payment within the debtor period is a major problem for many of them. The majority of plumbing and heating contractors require prompt payment to ease potential cash flow problems which often lead to them being unable to buy supplies, meet their own debt repayments and even pay staff.
“I welcome this legislation as I hope it will help empower small businesses, particularly in the construction industry, to make informed decisions about who they do business with, whilst also driving change in the payment cultures of large business.”
To help large businesses prepare for the new duty to report requirement, the Government will be providing guidance on how to comply in early 2017.
The duty to report requirement is part of a package of Government measures to tackle the issue of late payment. This includes the appointment of the Small Business Commissioner, who from autumn 2017 will support small businesses in resolving payment disputes.
