THE scourge of late payment is set to be tackled by the government and a group of big industry players.

A new Advisory Board is being formed with a view to strengthening the Prompt Payment Code and ensure suppliers are paid on time; an issue that has long plagued sole traders, limited companies and people just setting up a business.

Representatives on the board come from such businesses as Aviva, Barclays, Fujitsu and Greggs. The Department for Business, Innovation and Skills that these representatives were chosen because of their good reputations on payment practices.

The Prompt Payment Code contains a set of principles for businesses to follow when they are dealing with suppliers and when it comes to paying them. So far, about 1,700 businesses and public authorities have committed to the principles.

Ted Salmon, FSB North East Regional Chairman weclomed the move.

“It is time to put a stop to big business using their size and power to force small firms to accept late payment, excessively long payment terms, or demand payment to be on a supplier list," he said.

“Small businesses are suffering, stifling their ability to grow, and this problem is only getting worse despite the economic recovery. In 2008 £18.6bn was owed to small firms by big ones, in 2014 this has rocketed to £46.1bn. The moves to greater transparency proposed in this consultation are welcome as they include 18,000 of the largest firms.

“However, the worst offenders will choose not to sign up to the voluntary prompt payment code, leaving small businesses few options to combat late payers. Small businesses need to be given real power fight back.”