Contact Us

UK government ministers are trying to protect small firms from long payment delays by implementing set payment terms for public sector contracts.

Cabinet Office minister, Francis Maude confirmed that legislation would be introduced to mandate 30-day payment terms throughout the supply chain for public sector work.

Maude hopes by implementing EU rules on public procurement it would avoid a situation where, even if Government met its obligation to pay suppliers within a 30-day window, large companies delay in paying their smaller suppliers.

“The Government was giving a huge cash flow boost, a working capital boost to larger companies,” said Maude.

The move comes weeks after the Government was urged to improve payments to SMEs by the National Audit Office (NAO) who found that a third of SMEs were not paid within 30 days for public sector work.

Graeme Fisher, head of policy at the Federation of Small Business (FSB), said: “There is not a single silver bullet to solve this problem. Ultimately for the UK to have a better payment culture, the issue has to be addressed by the private sector.

“We must see action to reverse the trend, with boardrooms taking responsibility for this issue.”

Nevertheless, the Government confirmed it has surpassed its target – set in the coalition agreement - of increasing the percentage of public sector contracts awards to SMEs to 25 per cent.

Mr Maude confirmed that in the financial year 2013-14, 26.1 per cent of central government spending went to small firms, representing £11.4bn in value.

However, just 10.3 per cent was given in the form of direct contracts with the remainder indirect contracts.


Image: BISgovuk

Date published 27 Feb 2015 | Last updated 27 Feb 2015

Choose the right accounting firm for you

Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?

Local business focus icon

Local business focus

We specialise in supporting independent businesses and work with 80,684 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.

Come and meet us icon

Come and meet us

We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.

Switching is simple icon

Switching is simple

Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.

See how TaxAssist Accountants can help you with a free, no obligation consultation

0800 0523 555

Or contact us