- 18th July 2019
- Posted by: Suzy Hill
- Category: Business News
Household name companies shamed over late payments
Eighteen companies – including BT, British American Tobacco, and Centrica – have been suspended from the Prompt Payment Code (PPC) for failing to pay suppliers on time
The suspension of the high-profile companies from the PPC has prompted calls for tougher action on big firms which delay payments.
Screwfix, Prudential and various businesses of BAE Systems are also among those that have failed to honour their commitment to pay 95% of all supplier invoices within 60 days. Other household names on the list include Prudential, Galliford Try, De La Rue Holdings and Fujitsu Services.
The government provides a searchable list of payment practice reports for individual companies.
The PPC is administered by the Chartered Institute of Credit Management (CICM) on behalf of the Department for Business, Energy and Industrial Strategy (BEIS). Signatories pledge to uphold its best practice for payment standards to end the culture of late payment.
Businesses suspended from the code are invited to produce an action plan that leads to a substantial improvement in payment performance and are reinstated to the PPC as soon as they demonstrate compliance. Of those named and shamed in this round of notifications, only AB World Foods, part of Associated British Foods, the group that owns Primark, Allied Bakeries and Twinings, has so far failed to supply an action plan.
Philip King, CICM chief executive, said: ‘We will continue to challenge signatories to the code if the obligatory payment practice reporting data suggests that their practices are not compliant. We are encouraged that of the 18 who have been suspended or removed today, all but one has already submitted action plans to achieve future compliance, and we are working closely with those businesses to support a better payment culture.’
Andy Chamberlain, deputy director of policy at the Association of Independent Professionals and the Self-Employed (IPSE) said: ‘The names on this list, added to the ones released earlier this year, show how endemic late payment is across British industry.
‘The self-employed are uniquely vulnerable to late payment, if they aren’t paid on time they have no income.
‘The government must keep its promises and quickly push ahead with its proposed action to end late payment.’
Small business minister Kelly Tolhurst said: ‘Although the vast majority of businesses pay their bills on time, we recently announced ambitious new measures to level the playing field for small businesses as part of our modern Industrial Strategy.
‘These include plans to hold company boards accountable for payment practices and proposed new powers for the Small Business Commissioner to tackle late payments through fines and binding payment plans.’
From 1 September, any supplier who bids for a government contract above £5m per annum will be expected to answer questions about their payment practices and performance. If they are unable to demonstrate that they are paying 95% of invoices within 60 days, they may be excluded from the process.
Atos IT Services UK , which was included in a list of businesses removed from the code earlier this year, has since been re-instated having satisfied the PPC compliance board that it is now meeting the standards.