Ministers to crack down on late payments to aid small business

The UK government has vowed to introduce new measures to crack down on late payments that are crippling small businesses.

According to the government, nearly a quarter of UK businesses report that late payments are a threat to their survival.

But tackling this problem could keep an extra 50,000 businesses open each year.

Late payments are thought to cost the UK economy around £2.5bn a year with smaller business being especially affected by this.

The government will pay most of its own small suppliers within five days and they will negotiate what is the best way to tackle the issue in the private sector.

The new measures could involve accounting technology and measures such as requiring companies to nominate a director responsible for fair payment practices.

Unveiling the plans, Small Business Minister Kelly Tolhurst said: "Over the past 5 years the amount owed to businesses in late payments has halved, but we will go further to make sure all of our small businesses are treated fairly."

She added: "Today’s new call for evidence will help us identify the most effective way possible to tackle this issue once and for all and ensure small businesses are on a level playing field with their larger counterparts."