On 24th March, the Department for Business and Trade (DBT) announced a series of landmark measures to crack down on late payments. The Tile Association (TTA) welcomes the ban of retention payments and other industry improvements working to pay tiling contractors on time.
Firstly, the Government has proposed to ban the withholding of retention payments under the terms of construction contracts. This measure is crucial for ensuring that small businesses are paid for the work they deliver, rather than used as free credit and required to spend enormous resource chasing up debts. DBT reports that some 38 businesses shut their doors every single day because they are not paid on time – the equivalent of 266 a week, and well over a thousand in any given month.
There will also be a new 60-day cap on payment terms on all large firms when paying smaller suppliers and new mandatory interest on late payments, with a requirement for all commercial contracts to include statutory interest set at 8% above the Bank of England base rate.
The Small Business Commissioner will be given sweeping new powers to investigate poor payment practices, adjudicate payment disputes, and fine the worst offenders – with fines worth tens of millions for firms that persistently pay late or fail to comply with the new laws.
