The European standard for payment terms is set at 30 days. However, the UK government has been aiming towards a target of 10 days since 2008. Now, small business group The Forum of Private Business have made a fresh pledge to the government to stick to their original targets and not be swayed by the standards from the European Union.
The new European legislation comes courtesy of the European Parliament and European Council who have amended the EU Late Payments Directive. This is as a result of the problems faced by small businesses across Europe when customers fail to pay invoices on time. The Forum have welcomed the fact that the EU are attempting to do something about this issue but they do not believe that it goes far enough.
Phil Orford, chief executive of FPB, commented: “If approved by the European Parliament, as expected, these new rules under the Late Payments Directive should make significant inroads in tackling the £24 billion hole in the UK’s economy caused by late payment to small businesses. However, although it is still not a widespread success across the public sector, abandoning the UK’s domestic 10-day payment target would be a significant step backwards in tackling the culture of poor payment.
“Central government departments, for example, are largely meeting the 10-day target and it is important that the UK’s public sector continues to strive to set the standard for other countries and private companies to follow.”