By Jonathan London on 4th March 2015

Freelancers to benefit from Prompt Payment Code

Freelancers are set to benefit from a new government decision to add a 30 day clause into the Prompt Payment Code (PPC).

The voluntary code will now include the standard time for supplies to be paid and could improve the financial well being of a number of small businesses and freelancers.

Many companies are being urged by the government to consider signing up to the new code and business minister Matthew Hancock believes it will make a real difference.

Speaking at the EEF manufacturer’s association conference, the minister explained: “Making small businesses wait an unreasonable time for payment is entirely unacceptable. I know first-hand the great burden that late payment can place on firms – and how it can strain family finances – which is why I am committed to stopping it.”

He added that large firms should lead by example and commit to paying all small supplies within 30 days. Mr Hancock has already connected the FTSE 350 companies to ask them to sign up to the PPC.

The Institute of Directors (IoD) has welcomed the government’s reform and believes it will play a key role in tackling the widespread problem of late payments.

James Sproule, chief economist at the IoD and member of the PPC advisory board, said it was vital to put public pressure on businesses that repeatedly fail to honour suppliers’ terms.

He added that such naming and shaming would be a” more effective remedy than legislation” and is a positive step towards a culture change.

Jonathan London Written by Jonathan London

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