Government contractors urged to pay suppliers on time

Businesses have been warned they could be prevented from winning government contracts if they do not pay their suppliers on time.

The Government has sent letters to more than 10,000 businesses to warn them about new rules on prompt payments to their suppliers, which come into force in September 2019.

Under the new rules, suppliers bidding for government contracts above £5 million a year could be prevented from securing those contracts if they cannot show they are paying 95% of invoices within 60 days.

The Government claims this is part of an initiative to help "level the playing field" for smaller firms bidding for public contracts.

Other parts of this initiative include aiming to pay 90% of the Government's undisputed invoices from SMEs within five days, and requiring suppliers to advertise supply-chain opportunities worth more than £5m on the Contracts Finder website.

Oliver Dowden, Minister for Implementation, said:

"Prompt payment is critical for all companies helping to deliver public services, particularly small businesses which are the backbone of our economy.

"That's why, from September, if government contractors are late with supplier payments, they could be prevented from winning public contracts until they clean up their act."

Get in touch to discuss your business.