Take a look at this article on the BBC website regarding the fact that late payment legislation appears not to have been working.
Hardly a suprise though is it? It’s been tough for small business for the past three or four years, amd even when it wasnt tough, it was still a very competitive environment. In the midst of that competition, it would be a very brave small business that would stand out and be the one to say that they always charged late payment interest, that they always pursued non payment from the moment it became due and charged the allowable penalties available under the act. It would be brave and suicidal.
The reality is that any legislation that’s discretionary that doesnt take into account the business realities of the fact that the client is bigger than the supplier and that business is competitive, fails because the late payment act gets thrown out of the window pretty quickly in a negotiation where the big business, effectively calls the shots (and most times it isn’t even raised) when the big business has the power to give, or not to give a contract.
Small business just doesn’t have the confidence or the resolve to be the enforcers of such useless legislation against big business. They know what side their bread is buttered.
Make it compulsory Mr Osborne, or forget it.