Prompt Payment Code
New measures to support the Prompt Payment Code (PPC) have been confirmed in a letter sent to PPC signatories from the newly appointed Minister for Small Business, Margot James and chief executive of the Chartered Institute of Credit Management (CICM), Philip King.
The letter confirms that signatories to the PPC should be paying invoices within 30 days and that making payments within 60 days will be a requirement unless there are exceptional circumstances. The letter does not include any definition of the ‘exceptional circumstances’ and expects that as cases are reviewed it will become clearer how to understand what an exceptional circumstance is.
A new statutory duty for large businesses to report on payment practices was introduced by the Small Business, Enterprise and Employment Act 2015. The new rules are due to come into force on 6 April 2017. The PPC is currently administered by the CICM on behalf of the Department for Business, Energy and Industrial Strategy (BEIS). There are currently more than 1,800 businesses signed up to the code. The signatories have committed to the fair and equal treatment of payments to suppliers including to smaller businesses.
Small Business Minister, Margot James, said:
‘We need a culture change to stamp this out and the Prompt Payment Code continues to play an important role in bringing this about, alongside a package of measures taken forward by government and industry. The businesses signed up to the Code commit to demonstrating the gold standard of payment practices and it’s great to see so many of Britain’s leading household names on the list.’
The letter also confirms that a small business commissioner will be appointed to provide help and advice to business including settling payment disputes between small and large companies in relation to late payment practices.