In the Spring Statement before UK parliament, Chancellor Philip Hammond announced “definitive action to tackle the scourge of late payments for our small businesses.”

This includes the requirement of company audit committees to review payment practices, to be reported on in the annual accounts. Hammond also deferred to business secretary Greg Clark to announce “further details in due course.” Hammond also gave thanks to the Federation of Small Businesses (FSB) for their campaigning on this issue.

Carl D’Ammassa, group managing director for business finance at Aldermore Bank, said: “Late payments are a threat to SME businesses and our research finds that it remains a regular and serious issue for one quarter of SMEs, meaning it is essential that government continue to address the root causes. For too long, large organisations looked at their supplier terms as a means of financially boosting their performance – at the detriment of smaller companies. We are calling for this unfair practice to end.

“We welcome today’s announcement from the Chancellor which will require company audit committees, chaired by a non-executive director, to review payment practices, and report on them in their annual accounts. We have been calling for government to mandate the exposure of poor late payment practices in a uniform way and today’s announcement is a step in the right direction. We believe the government should incentivise businesses to ensure that paying suppliers late is financially not in their interest, as it is today.”

Research from business finance company Market Invoice has shown that around half of all invoices for creative industries were paid late in 2018. In 2018, an average invoice worth £38,137 was being settled 13 days beyond payment terms leaving the industry with £1.1bn of outstanding payments due at any one time.

In the same statement, Hammond promised that a government consultation on the impact of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) would be published ‘in the coming months’.