Ministers are to launch plans to hand a £2,000 national insurance cut to businesses and begin consultations on cutting slow payment of invoices. David Cameron will mark the introduction of the National Insurance Contributions Bill.
The Confederation of British Industry's (CBI) has said government plans to hand a £2,000 national insurance cut to businesses and begin consultations on cutting slow payment of invoices could help businesses experiencing cash flow difficulties.
Katja Hall, chief policy director, commented:
Late payment is a serious issue for all businesses but particularly for smaller firms, as cash flow is their life blood. Businesses already have a number of routes for recourse if they are paid late, but the reality is that few choose to act on late payment for fear of fall-out with their customers.
He added that it would mean 450,000 businesses will have their national insurance bills eliminated entirely.
An ambitious and thriving small business sector is vital for steering the economic recovery in the right direction and helping us to succeed in the global race.
We are determined to do everything we can to ensure that our small firms can be successful and prosperous and people can fulfil their aspirations.
Last week, we helped people get on the housing ladder and own shares. This week, we're helping small businesses start and expand. This Government is 100% backing people who work hard and want to get on in life and we're going to finish the job we started.
– Prime Minister David Cameron
The consultation on late payment will review whether the Prompt Payment Code can be strengthened, consider whether new legislation or penalties are needed, and look at what can be done to increase transparency.
Ministers will today launch in the Commons plans to hand a £2,000 national insurance cut to businesses and begin consultations on cutting slow payment of invoices.
David Cameron will mark the introduction of the National Insurance Contributions Bill with a tour of small businesses in the east of England, insisting the Government is keen to do everything it can help to help firms succeed.
The tax cut is due to be in place by April next year and the Government said 90% of the benefit would be felt by firms with fewer than 50 employees.
A consultation on ways to end late payment is also being launched, Mr Cameron said, because the problem can have a "devastating effect" on small and medium sized firms.