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Late payers to be flagged up to businesses under new proposals

The Small Business Commissioner, Paul Uppal, has recommended a new “traffic light” system that will warn smaller firms which businesses have a consistent record of late payment and those most likely to request longer payment terms.

It is thought that around £2.5 billion is lost annually within the economy due to late payments and they have been attributed to the closure of around 50,000 businesses each year.

Under the new proposals, current payment data collected by the Government will be used to highlight businesses with a poor record.

Large companies have been required to report supplier payment records twice a year since 2017 and so it is thought that the Government already holds a good record of poor payers. However, companies which fail to report payment practices will also receive a red light under the new system.

The Small Business Commissioner explained that his plans would allow smaller suppliers to make better decisions on who they work with.

The Government has outlined its own measures that will ensure that public contracts are only given to companies that can demonstrate prompt payment to their own suppliers.

At present, the Commissioner does not have the authority to distribute late payment fines, and his department only managed to recover £2.1 million in unpaid invoices his first year in office.

Link: Small Business Commissioner calls for ‘traffic light’ warning system

Latest News

New figures show that a quarter of estates paying Inheritance Tax (IHT) are investigated by HMRC

The response to a Freedom of Information (FoI) request has revealed that as many as one in four estates that are liable for IHT are investigated each year.

In 2018-19, more than 5,500 investigations were launched by HMRC into the approximately 22,000 estates that had to pay the tax.

Despite the introduction of the Residence Nil Rate Band (RNRB) effectively increasing the IHT threshold when a main residence is left to a direct descendent, the number of investigations has increased by 7.8 per cent since 2017.

The figures came within weeks of the Office of Tax Simplification (OTS) unveiling proposals to simplify IHT, which is widely regarded as overly complicated and difficult to understand.

Link: One in four estates that pay inheritance tax investigated by HMRC

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