CAMPAIGNERS have welcomed moves to tackle the “scourge” of late payment, which they say leads to the closure of 50,000 small firms a year.

Chancellor Philip Hammond announced steps to deal with the issue during his spring statement yesterday.

He acknowledged the “tireless” campaign of the Federation of Small Businesses (FSB) over the issue.

Mr Hammond said was taking “definitive action to tackle the scourge of late payments for our small businesses”.

He added: “A full response to last year’s call for evidence will be published shortly, but I can announce today that as a first step we will require company audit committees to review payment practices, and report on them in their annual accounts.”

He said business secretary Greg Clark would announce more details, adding: “I congratulate the FSB, in particular, on its tireless campaign on this issue.”

Chris Davis, agent for the FSB in Dorset, said: “Late payment has been a huge issue for many, many years The problem has always been that many large companies have seen the small companies as a means of obtaining free finance for the duration of their payment terms.

“This situation should never have been the case. Small businesses account for well over 99 per cent of all UK businesses. Late payments make small businesses suffer, often having to find expensive means of chasing recovery of the debt and also having to find alternative methods of finance.

“The FSB has long fought for fairness on late payment and now the chancellor has at long last listened and acted once again action has been taken, proving once again the FSB to be a force to be reckoned with at all levels of government.”

FSB national chairman Mike Cherry said: “Poor payment practices by big businesses towards their smaller suppliers are rife and pernicious, leading to the closure of 50,000 small firms a year.

“Four out of five small businesses have been paid late, and we told the chancellor that today was the moment to act, to tackle this scourge once and for all.”

He added: “The end of late payments could finally be in sight. It can’t come soon enough, to bolster small businesses at a time when they are in great need of support and a lift in confidence.”

The speech saw Mr Hammond promise a “dividend” if Britain left the EU with a deal, but warn that a no-deal Brexit would be a “significant” blow to the economy.

He announced that the halving of the apprenticeship levy to five per cent will happen early, from this April.

The government will explore ways to help the high street by making better use of planning tools such as compulsory purchase orders and local development orders.

There would be measures to ensure that the UK maintains “world-leading” financial services regulatory standards as soon as it leaves the EU.

And there will be a “light touch” approach to penalties after the introduction of the Making Tax Digital system from April 1.

Mr Hammond will ask the Competition and Markets Authority to study the digital advertising market.

Ian Girling, chief executive of Dorset Chamber of Commerce and Industry, said: “It was encouraging to hear about investment in technology, infrastructure and housing.

“We must ensure that Dorset presents a unified front to gain its fair share of any money, and to make sure its voice is heard loud and clear when future funding is decided.

“Measures to tackle the scourge of late payments for small businesses and funding in the apprenticeship system were also welcome although some chamber members may feel that they do not go far enough.“It is clear that the economy remains sluggish and at the mercy of Brexit uncertainty. Any measures in the spring statement may just end up as little more than futile gestures unless the Brexit chaos is ended quickly and business given much needed clarity about the way ahead.”

David Chismon, partner in Safffery Champness chartered accountants in Bournemouth, said: “Due to the Brexit debates in the House of Commons the speech was relatively short and as anticipated did not feature any changes to the taxation system, which will be a focus of the autumn budget later this year.”

He added: “As always, various documents have been published immediately following the speech and from a tax perspective there is the long awaited draft legislation for capital allowances on new non-residential structures and buildings announced in Budget 2018. This new relief will apply for money spent on qualifying commercial property after October 29, 2018, with a flat rate of two per cent over a 50-year period. This is a welcome extension to the capital allowances regime but the sting in the tail is a two per cent reduction to the ‘integral features’ allowance from eight per cent to six per cent.