Late payers to small business could be barred from public sector contracts

Originally written by Timothy Adler on Small Business

Some of the biggest Government contractors face being barred from public sector contracts if they fail to start paying small businesses on time.

From September, outsourcers which do not pay 95pc of small business subcontractors within 90 days could be frozen out of public sector procurement, according to Cabinet Office plans. The rule would apply to all contracts worth more than £5m in the £50bn Government procurement sector.

Outsourcers including Kier, Balfour Beatty, Mitie and Capita have fallen below the 95pc threshold, according six-monthly data collected by the business department, and would be excluded from bidding for new contracts.

Percentage of suppliers paid within 60 days %
Kier 82%
Balfour Beatty 82%
Mitie 88%
Interserve 90%
Capita 90%
Serco 96%
G4S 100%

Source: company reporting


Last week, the Government announced that large companies which pay small businesses late could be fined under new powers given to the Small Business Commissioner. But professional associations and payment platforms say the Government late-payments crackdown does not go far enough. All large companies should be forced to pay small business suppliers within 30 days, they say.

“We expect [all companies] to meet the 60-day target and, if they don’t, they may not be considered for public sector contracts,” small business crown representative Martin Traynor told the Sunday Times.

Traynor said the government would continue to work with companies that cold prove they had a strategy in place for improving payment practices, but added that those unable to show progress would be barred.

“If you can’t satisfy the people you are procuring, then you won’t be bidding for it,” he said.

Mike Cherry, chairman of The Federation of Small Business, accused outsourcers of “clutching taxpayers’ money to improve their cash flow”.

Cherry said that when Government pays its outsourcers within five days, there is no excuse for them to sit on these funds. “Those who fail to comply … should be in no doubt of the consequences,” he warned.

Further reading

How to tackle late payments to your small business

Late payers to small business could be barred from public sector contracts

Source: SmallBizUK

Jeremy Hunt will scrap business rates for thousands of high-street shops

Originally written by Timothy Adler on Small Business

Jeremy Hunt has pledged to exempt hundreds of thousands of small businesses from business rates if he becomes Prime Minister.

Tory leadership contender Jeremy Hunt intends to scrap taxes for nine out of 10 high street shops in a bid to save the high street.

Experts have warned that high streets face the loss of 200,000 jobs unless the Government acts to revive traditional town centres hit by the rise of internet shopping.

The move will save newly exempted businesses up to £6,500 each, and will scrap taxes on 24,500 businesses based in Birmingham (5,000), Manchester (8,000), Leeds (6,000), Newcastle (2,000) and Bristol (3,500).

Hunt has already promised to cut corporation tax from 19pc to as low as 12.5pc, a policy which has been costed at £13bn a year.

The Foreign Secretary, who is never afraid to brandish his entrepreneur credentials, told the Daily Telegraph that his proposals would “give a new lease of life to the British high street” and provide “hard working local businesses an enormous cash boost”.

“My blueprint will give a new lease of life to the British high street and give our hard working local businesses an enormous cash boost,” he said.

“It was once said Britain was a nation of shopkeepers. But if we don’t act this will no longer be the case

“Too many small businesses are being put out of business by tax bills they can’t afford to pay.

“While many people choose to shop online, there is a clear demand for a local choice too.

“And the current system leaves the taxpayer out of pocket, shopkeepers out of a job and can deprive local people of places to spend time with friends and family.”

Hunt said that his government would reform the current Retail Discount rate, so that businesses which qualified for the discount would see their entire business rate bill cancelled.

At present , those with a rateable value below £51,000 are eligible for their bill to be cut by one third.

Hunt’s pledge builds on a £900m already committed by Chancellor Philip Hammond to reduce business rates, as well as a £675m cash injection to turn empty shops into cafes, community centres and new homes.

Further reading

Tory leadership hopefuls propose major tax reforms for small businesses

Jeremy Hunt will scrap business rates for thousands of high-street shops

Source: SmallBizUK